Use your graphing calculator to find how long it will take for $9000 invested at 3.325% per year compounded daily to triple in value. Find the answer to the nearest year. Use 365 days for a year.
A) 44,219 yr
B) 4,402,084 yr
C) 33 yr
D) 0 yr

Question

Quizplus · Accepted Answer

To find the time it takes for an investment to triple in value with daily compounding interest, we use the formula $A = P(1 + \frac{r}{n})^{nt}$, where $A$ is the amount of money accumulated after n years, including interest, $P$ is the principal amount (the initial amount of money), $r$ is the annual interest rate (decimal), $n$ is the number of times that interest is compounded per year, and $t$ is the time the money is invested for in years. We want $A = 3P$, $r = 0.03325$, $n = 365$, and $P = 9000$. Solving for $t$ gives us approximately 33 years.

Use Your Graphing Calculator to Find How Long It Will