At approximately what rate would you have to invest a lump-sum amount today if you need the amount to triple in six years? Assume interest is compounded annually.
A)20%
B)12%
C)24%
D)Not enough information is provided to answer the question.
E)None of the above is a correct answer.

Question

Quizplus · Accepted Answer

To find the rate, use the formula for compound interest: FV = PV(1 + r)^n. Here, FV/PV = 3, n = 6. Solving 3 = (1 + r)^6 gives r ≈ 0.2019 or 20.19%. Thus, approximately 20% is needed.

At Approximately What Rate Would You Have to Invest a Lump-Sum