At an annual interest rate of 20 percent,about how many years will it take $100 to triple in value?
A)5
B)6
C)8
D)9

Question

Quizplus · Accepted Answer

Using the formula for compound interest where A is the final amount, P is the principal, r is the annual interest rate, and n is the number of times the interest is compounded per year:
A = P(1 + r/n)^(nt)
We plug in the given values:
300 = 100(1 + 0.2/1)^(1t)
Simplifying and solving for t:
3 = 1.2^t
t ≈ 5.6
Rounding to the nearest whole number, it will take about 6 years for $100 to triple at an annual interest rate of 20 percent. Therefore, the answer is B.

At an Annual Interest Rate of 20 Percent,about How Many