Math

Suppose you invest your money into an account that pays 4.0% per year compounded quarterly. How long (in years) will it take for your money to triple?

Round your answer to one decimal place.

I know I use this...
A=P(1+r/n)^nt

But to go from there and get an answer, so confused. Thank you for your help!

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asked by Tina
  1. Eq1: Pt = Po(1+r)^n.
    Eq2: Pt = 3Po.

    r = (3mo./12mo.) * 4% = 1% = 0.01 =
    Quarterly int rate expressed as a decimal.

    n=4 comp./yr * t yrs.=4tcomp. periods.

    In Eq1,substitute 3Po for Pt:
    3Po = Po(1.01)^4t,
    Divide both sides by Po:
    (1.01)^4t = 3,
    Take Log of both sides:
    4t*Log(1.01) = Log3,
    4t = Log3 / Log(1.01) = 110.41,
    t = 27.6 yrs.

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    posted by Henry

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