Question

The time is takes to quadruple an investment of 50000 made today , if the investment earns a 4% rate of return annually is closest to:

a. 35.35 months

b. 29.42 years

c.35.35 years

d.294.2 months

Answer 1

Given, Investment Amount = 50,000, interest rate (R) = 4% annual

We want to make a quadruple of investment that means turning $50,000 into $2,00,000.

Future Value = Principal amount * ( 1+ R/100) ^ N

2,00,000 = 50,000 * (1+4/100) ^N

2,00,000 = 50,000 * (1.04) ^ N

4 = (1.04) ^ N

To solve above equation, we can use Log, apply log on both sides we will get,

Log 4 = N * Log 1.04

0.602059 = N * 0.017033

N = 35.346 years or 35.35 years approx

So, the correct answer is Option (C) i.e.35.35 years.