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How many years will it take for an investment to treble at an annual interest rate of 10%?

Mathematics

ScanSolve AI Answer

Answer

20 years20 \text{ years}

Step-by-step solution

3 steps
  1. Identify the formula for simple interest and the given values.

    The formula for simple interest is A=P(1+rt)A = P(1 + rt), where:

    • AA is the final amount
    • PP is the principal amount (initial investment)
    • rr is the annual interest rate (as a decimal)
    • tt is the time in years

    From the problem:

    • The money needs to treble, so A=3PA = 3P.
    • The interest rate is 10%10\% per annum, so r=0.10r = 0.10.
  2. Substitute the values into the formula.

    3P=P(1+0.10t)3P = P(1 + 0.10t)
  3. Solve for tt.

    Divide both sides by PP:

    3=1+0.10t3 = 1 + 0.10t

    Subtract 1 from both sides:

    2=0.10t2 = 0.10t

    Divide by 0.10:

    t=20.10t = \frac{2}{0.10} t=20t = 20

    It will take 20 years for the amount of money to treble.

    The final answer is 20 years20 \text{ years}.

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