SOLUTION: Joe decides to invest USD 5400 in an account with a 2.4% nominal annual interest rate.
Given that the interest is compounded monthly, find the minimum number of years that it wi
Algebra ->
Customizable Word Problem Solvers
-> Finance
-> SOLUTION: Joe decides to invest USD 5400 in an account with a 2.4% nominal annual interest rate.
Given that the interest is compounded monthly, find the minimum number of years that it wi
Log On
Question 1171745: Joe decides to invest USD 5400 in an account with a 2.4% nominal annual interest rate.
Given that the interest is compounded monthly, find the minimum number of years that it will take for Joe 's investment to triple . Give your answer correct to the nearest year.
You can put this solution on YOUR website! There is a rule of 110 for tripling that would suggest 110/2.4=45.83 years.
That comes from ln 3=1.0986 which is 110 when converted to per cent.
P=Po(1+0.024/12)^12n
P/Po=3
so 3=1.002^12n
ln 3=12n ln 1.002
12n=549.86. That is the number of months
n=45.82 years in close agreement with the above.
Answer is 46 years.
