A few days ago

How long will it take you to triple your money if you invest it at a rate of 6% compounded annually?

Is there a formula for solving this?

Top 2 Answers
A few days ago

Favorite Answer

19 years.



A few days ago
Anand S
The formula for calculating compound interest is

A = Ao(1+r)^n,

where A is your current amount

Ao is the amount you started your investment with

r is the interest rate

n is the number of years (since you’re compounding annually)

To solve your problem, you want A to be 3*Ao.

3*Ao = Ao(1+0.06)^n

3 = (1.06)^n

log1.06 (3) = n

The number of years is the log of 3 in base 1.06. Your calculator probably doesn’t do log in base 1.06, so you use the change of base formula:

logb (x) = log (x)/log (b)

log1.06 (3) = log (3)/log (1.06) = n = 18.85, so you need 19 years to triple your money.