Question

    An initial investment grows to four times its original

    amount in 6 years under compound interest. How many years will it take for the investment to grow to 16 times its original amount under the same conditions?
    A 36 Correct Answer Incorrect Answer
    B 24 Correct Answer Incorrect Answer
    C 12 Correct Answer Incorrect Answer
    D 18 Correct Answer Incorrect Answer

    Solution

    Let the amount invested be Rs. 'P' and rate of interest is 'R%' p.a.

    Amount = Principal X [(1 + (R/100) ]time

    So, 4P = P X [1 + (R/100) ]6

    Or, [1 + (R/100) ]6 = 4

    On squaring both sides,

    We get, [1 + (R/100) ]12 = 16

    Therefore, required time = 12 years

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