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 At what simple interest rate will a sum of money triple itself in 5 years time?

Hi,

First look at the response that Stephen and I gave to Tiffany when she asked "cindy puts 5,025 in a bank account that earns a simple interest rate of 8%. How much money will be in the account at the end of 6 years?". If you look closely at our response you will see that the amount of interest earned each year is the amount originally invested times the interest rate. You want the amount to triple in 5 years so at the end of 5 years you want the total interest earned to be twice the original investment. If the original investment is $I and the annual interest rate is r then you want 2 ×$I = 5 × $I × r. If you divide both sides of the equation by$I you get

2 = 5 × r.

What is r?

Penny

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