SOLUTION: You have $2500 to invest at 6% interest compounded quarterly. For how many years will the money need to be invested for that amount to triple? Type your answer in decimal form, rou

Question 1039193: You have $2500 to invest at 6% interest compounded quarterly. For how many years will the money need to be invested for that amount to triple? Type your answer in decimal form, rounded to the nearest half year
Answer by addingup(3677) (Show Source): You can put this solution on YOUR website!
So we have 4 periods per year, thus our rate per period will be 0.06/4 = 0.015
Our financial formula for interest is:
FV = PV(1+r/n)^nt But I simplified it in my opening line, so to make it easier we have:
7500 = 2500(1+0.015)^t Divide both sides by 2500
7500/2500 = 1.015^t To get rid of the exponent we have to use logs:
t = ln(7500/2500)/ln1.015
t = 1.099/0.01489 = 73.81 periods and since we want years (each period is 1 quarter): 73.81/4= 18.45 years
----------------------------------------------
Check:
Amount = 2500(1+0.06/4)^4*18.45
= 2500*3.000 = 7500 I have the correct answer.
Run the numbers in your calculator to get familiar with the process.
John

RELATED QUESTIONS
if you deposit $2500 for 3 years at a 5.7% interest compounded quarterly, how much money... (answered by jim_thompson5910)

How much money would you need to invest now (lump sum) at an interest rate of 3.4%,... (answered by jorel1380)

please help, I don't know how to do this: find the value of $2500 invested at 4.5% annual (answered by rfer)

My teacher didn't give me any formulas for these things.. please help me!! T~T 1. You (answered by KMST)

a company will need $45,000 in 6 years for a new addition to meet the goal, the company... (answered by reviewermath)

In order to help pay for college, the grandparents of a child invest $2,100 in a bond... (answered by Alan3354,josmiceli)

How many years, correct to the nearest tenth of a year, will it take for a sum of money... (answered by stanbon)

Irene McGuinness is planning a vacation in Europe in 4 years, after graduation. She... (answered by stanbon)

How long will it take for any amount of money to triple if invested at 6% annual interest (answered by mananth)