What annual rate of return would Phillip have to make on his investment in order to...

What annual rate of return would Phillip have to make on his investment in order to triple his money in 5 years?

Group of answer choices

A. 12.29%

B. 24.57%

C. 11.61%

D. 25.22%

E. 18.36%

Expert Solution

Answer is 24.57%

Amount Invested = $1
Desired Sum = $3
Time Period = 5 years

Amount Invested * (1 + Interest Rate)^Time Period = Desired Sum
$1 * (1 + Interest Rate)^5 = $3
(1 + Interest Rate)^5 = 3
1 + Interest Rate = 1.2457
Interest Rate = 0.2457 or 24.57%

Therefore, Philip has to earn 24.57% on his investment.

jeff jeffy answered 2 years ago

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