Question

In an account Un Sinha currently has $71,410.00. At a rate of 7.00% how long will it take for them to have $280,570.00 assuming tri-annually compounding? (Hint: compute the exact years, do not use rule of 70/72)

		a. 20.22 years
		b. 59.33 years
		c. 6.74 years
		d. 19.78 years

Answer 1

Compound interest formula:

Where,
A = Amount in the future
P = Principal amount
i = rate of interest in decimal form (i.e 7% = 0.07)
n = number of years
a = number of compounding in a year (tri-annually means a =3)

Therefore,

Now, taking log₁₀ on both sides, we get:

Therefore, the correct answer is d.19.78 years.