Which of these is closest to the time in years that it will take an investment to triple when it is invested in an account that pays 5.4% annual interest, compounded monthly? 20.4 years
20.9 years
2.1 years
0.25 year

20.4 years

Step-by-step explanation:

The nper formula in excel comes handy in this scenario:

=nper(rate,pmt,-pv,fv)

Rate is the monthly rate of 5.4%/12

Assuming actual investment is $5,000 which is pv

The triple amount would be $5,000*3=$15,000 which is future value fv.

pmt is the regular cash flow the investment which is zero

=nper(5.4%/12,0,-5000,15000)= 244.68  months

Yearly it can be expressed as = 244.68/12  =20.39  years

When rounded to one decimal place it becomes 20.4 years

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step-by-step explanation:

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