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