how many years will it take you to triple your money at 10% interest compounded annually?

Question

Needs to be rounded to the nearest hundredth.

Answer 1

Hi Hazel,

 

This is a compound interest problem. Use the formula 

A = P(1+r/n)^nt

r = interest rate in decimals

t = time in years

n = number of times compounded per year

A = future amount

P = initial amount

We are given that our money will triple so we can let A = 3x if we let P = x

r = 0.1

n = 1

then we can write

3x = x(1+(0.1/1))^1t

3x = x (1.1)^t

3 = 1.1^t (divide both sides by x)

take log of each side

log 3 = log 1.1^t

log 3 = t*log(1.1)

t = log 3 / log(1.1)

t = 11.64 years