Question

A finance company declares that, with compound interest rate, a sum of money deposited by anyone will become 8 times in three years. If the same amount is deposited at the same compound-rate of interest then in how many years it will become 16 times?

(a) 4

(b) 5

(c) 6

(d) 7

Answer 1

Correct option is (a) 4

Let the principal = x in Rs.

In the first case Time = 3 yrs, amount = 8x, rate = R.

Now Amount = Principal × (1 + rate)time

In the second case the amount = 16x, Time = n.

So, after 4 years, the amount will become 16 times of the invested money.