We use the time value of money theory to estimate how long it takes for a offered sum of money to triple in value. The theory examines the relationship between four variables: time, interest rate, future value, and current value. If one of the characteristics is unknown, the other three are used to calculate the unknown. We also use logarithms in our analysis for the time period.
Present value =$5,000
When trippled, the future value =5,000*3=$15,000
r = 8% adjusted for daily compounding = 0.08/365
Present value=Future Value/(1+r)n
5,000=15,000(1+(0.08/365))
n(1(0.08/365))n= 15,0005,0001.000219178
n=3n=log(3)log(1.000219178)n=5,012.9697
daysn=13.7342 years
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