What continuously compounded rate of return allows you to triple your money in 20 years?

Question

Quizplus · Accepted Answer

To find the continuously compounded rate of return that triples your money in 20 years, use the formula for continuous compounding: $ A = Pe^{rt} $. Here, $ A/P = 3 $, $ t = 20 $, and we solve for $ r $: $ 3 = e^{20r} $. Taking the natural logarithm of both sides gives $ \ln(3) = 20r $, so $ r = \ln(3)/20 \approx 0.0581 $, or 5.81%.

What Continuously Compounded Rate of Return Allows You to Triple