What is the rate on an investment that triples $9465 in 35 years? Assume interest is compounded monthly.
A) 3.1%
B) 2.6%
C) 3.9%
D) 2.1%

Question

Quizplus · Accepted Answer

The rate can be found using the formula for compound interest: A = P(1 + 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. Here, A = 3*9465, P = 9465, n = 12 (compounded monthly), and t = 35. Rearranging the formula to solve for r gives us the correct interest rate. Plugging the values into the formula and solving for r gives an interest rate of approximately 3.1%.

What Is the Rate on an Investment That Triples $9465