00:03
So let's say that you want to invest some money, and in 10 years you hope to triple your investment.
00:09
You will be compounding annually, and you want to find out what annual interest rate you would need in order to triple your investment after 10 years.
00:18
So since we are using compound interest, we should use the compound interest formula, which is a equals p times 1 plus r over n to the nt power.
00:35
A is the future amount of our investment and p is the present value of our investment.
00:41
And we want a to be 3 times greater than p, or a equals 3p.
00:48
This shows a tripling in our investment.
00:52
N is the amount of times that it will be compounded per year, since we are compounding annually n equals 1.
00:58
It is only compounded once per year.
01:01
And t is the period we are willing to wait...