Question

Find the rate at which a sum of money will double itself in 3 years, if the interest is compounded annually.

Answer 1

Given, 

Time = 3 years 

Let rate = R % 

Let principal = P 

So, amount becomes = 2P

A \(={P}[({1}+\frac{R}{100})^T]\)

\(={P}({1}+\frac{R}{100})^3\) = 2P

\(={1}+\frac{R}{100}\) \(={2}^{\frac{1}{3}}\) = 1.2599

\(=\frac{R}{100} = 1.2599-{1}\)  = 0.2599

Rate = 25.99%