Question

A sum of money placed at compound interest doubles itself in 8 years. In how many years will it amount to four times itself ?
1. 24 years
2. 26 years
3. 16 years
4. 32 years

Answer 1

Correct Answer - Option 3 : 16 years

Given:

A sum of money placed at compound interest doubles itself in 8 years.

Formula used:

A = P(1 + R/100)n

where A = amount 

p = principal

R = rate 

n =  time

Calculations:

Let P be Rs.1, then A = Rs.2

A = P(1 + R/100)n

⇒ 2 =  1(1 + R/100)⁸

⇒ 4 = 1(1 + R/100)¹⁶ (by squaring both sides)

comparing this to A = P(1 + R/100)n 

we get n =  16 years

∴ the correct answer is 16 years.