Question

A bank pays interest at the rate of 11% on $6000 deposited in an account.After how many years will the money have tripled?

Answer 1

he answer can be found by using the following compound interest formula:

12,000 = 6,000(1+0.11)^n .... (n is number of years)

n = 6.65 years

3. The answer can be found by 'trial and error' method(by using different figures so as to produce the figure of 12,000).

Answer 2

Concept:

Interest is a sum of money that a borrower pays to a lender or investor in addition to repaying the borrowed funds.

After the first year, the principle gets changed as we add the interest of the first year to it.

Given:

Principle= 6000

Rate Interest= 11%

Find:

We have to find after how many years the money will get tripled.

Solution:

Principle= 6000

Rate Interest= 11%

After 1 year the value will get increased = 6000 x 111/100

After 2 years the value will get increased = 6000 x (111/100)²

After n years the value will get increased by 18000( tripled of 6000):

            6000 x (111/100)^n = 18000

                         (111/100)^n = 3

                            (1.11)^n = 3

When we put the value of n as 11 we get a value of 3.14 which is almost 3.

So, after 11th year the money will get tripled.

Hence, in the end of the 11th year, the money will get tripled.

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