If $2000 is invested at 7.5% annual interest compounded quarterly, how many years will it take for the investment to triple to $6000?

Question

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Answer 1

P(t) = Po(1+ r/n)^nt

where Po = original amount, the principal = $2000

n = number of compounding periods per year = 4

t = number of years

r = APR = annual interest rate = 7.5%

P(t) = the amount after t years = $6000

plug in the known values and solve for t

6000 = 2000(1+ .075/4)^4t

3 = 1.01875^4t

4t= about 59.2

t = about 59.2/4 = 14.8 years

= about 15 years to grow from 2K to 6K

Answer 2

3 = (1 + (0.075/4))^4t

Solve for t and answer