Question

Ram deposited a certain sum of money in the scheme A at certain rate of compound interest for 5 years . After 5 years , it would become double itself, then how much it would become after 20 years 
1. 8 times 
2. 16 times
3. 81 times 
4. 4 times 

Answer 1

Correct Answer - Option 2 : 16 times

Given: 

Time for scheme A = 5 years 

Concept Used: 

In compound interest, Interest of the principal increased in geometric progression with time 

Calculation:

Let the principal be x 

⇒ After 5 years , Amount = 2x 

⇒ After 20 years , Amount = (2)⁴x = 16x 

∴ The sum of money would become after 20 years is 16 times of itself