Use your graphing calculator to find how long it will take for $6600 invested at 5.85% per year compounded daily to triple in value. Find the answer to the nearest year.
A) 25,219 years
B) 19 years
C) 0 years
D) 2,502,126 years

Question

Quizplus · Accepted Answer

To find how long it will take 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. To triple the investment, $A = 3P$, so we have $3P = P(1 + \frac{0.0585}{365})^{365t}$. Solving for $t$ with a graphing calculator or through logarithmic manipulation, we find that it takes approximately 19 years for the investment to triple.

Use Your Graphing Calculator to Find How Long It Will