Question

Republic Finance offers money at 1.27% per month compounded monthly. How many YEARS will it take for an investment to triple? (Your answer can be a decimal.)

Answer 1

The company has a offer where money is paid an interest rate at 1.27% per month compounded monthly. Find the number of YEARS = N it takes for an investment to triple by considering the initial amount to be P. Since interest rate is already given per month and compounding is done monthly, the effective rate per month is unchanged at 1.27% per month. Yearly interest rate is (1 + 1.27%/1)^12 - 1 = 16.3509%

3P = P(1 + 16.3509%)^N

ln (3) = N x ln (1.163509)

N = ln(3)/ln(1.163509)

= 7.25

Approximately it will take 7.25 or 8 years to tripple the investment.