How long will an investment take to triple its value at 8.5% p.a compounded half-yearly?
Answers
Given : an investment triples at 8.5 % per annum compounded half yearly
To find : Time taken to be Triple
Solution:
Let say investment = P
becomes three times
=> Amount A = 3P
Rate of interest = 8.5 % per annum = 4.25 % Half yearly
Time = n Years = 2n (half years)
using formula
A = P(1 + R/100)ⁿ
=> 3P = P (1 + 4.25/100)²ⁿ
=> 3 = ( 1.0425)²ⁿ
Taking log both sides
=> log 3 = 2nlog(1.0425)
=> 0.477 = 2n ( 0.018 )
=> 2n = 26.4
=> n = 13.2
13.2 Years for investment to be Triple
it will take more than 13 years for investment to be triple
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