Problema Solution
How long will it take for an investment to triple if it is compounded continuously at 14%?
Answer provided by our tutors
Let
P = the principal (the investment)
t = the time in years
r = 0.14 or 14% the annual interest rate
A = 3P the future value (the investment will triple)
the future value formula is:
A=Pe^(rt)
we plug the above values and get:
3P = Pe^(0.14t)
Pe^(0.14t) = 3P
........
........
t = 7.85 years
It will take 7.85 years for the investment to triple.