Question 589070: how long will it take to quadruple your money if you invest it at an interest rate of 5% and it is compounded every 4 months?
Answer by lwsshak3(11628)   (Show Source):
You can put this solution on YOUR website! how long will it take to quadruple your money if you invest it at an interest rate of 5% and it is compounded every 4 months?
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compound interest formula: A=P(1+r)^n, P=initial investment, r=interest rate per period, n=number of periods, A=amount after n periods
A/P=(1+r)^n=4
For given problem:
3 compound periods per year
r=.05/3
n=number of compound periods (what we want to find)
..
(1+r)^n=4
(1+.05/3)^n=4
take log of both sides
nlog(1+.05/3)=log(4)
n=log(4)/log(1+.05/3)
using calculator
n≈84 compound periods
or
84/3≈28 yrs
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