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Please help with the homework:
At what compound interest rate per annum must money be invested
if the principal must treble in ten years and interest is calculated monthly.
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Let "r" be the compound interest rate per annum.
Start from the formula for the future value
3 = =
Take logarithm base 10 of both sides of the equation
log(3) = 120*log(1+r/12).
Find log(1+r/12) = = 0.00397601.
It gives 1 + r = = use your calculator = 1.009197137.
Hence, r/12 = 1.009197137 - 1 = 0.009197137; then r = 12*0.009197137 = 0.110365644 = 0.1104 (rounded).
ANSWER. The needed compound interest rate is about 11% per annum (rounded).
Solved.