Question

Bob has $15,000 invested in a bank that pays 7% annually. How many years will it take for his funds to triple?

		10.24 years
		15.15 years
		15.95 years
		16.24 years
		None of the above answers are correct

Answer 1

rate or r 7% or 0.07;Present Value PV 15000; Future value 45000 (triple); n or nper ?

Future Value = Present Value * ((1+r)^n)

Substituting values in the formula

45000 = 15000 * ((1.07)^n))

45000 / 15000 = ((1.07)^n))

3 = ((1.07)^n))

You can use the NPER function in excel to calculate total period or n

NPER(Rate, PMT, PV, FV, Type)

FV is entered as a negative figure

rate 7%; PV 15000; FV -45000 NPER(7%,,15000,-45000)

16.23757367 or 16.24 yrs when rounded to2 decimal places