Multiple choice

A sum of money at a compound interest doubles in one year. In how many years will it amount to 8 times itself?

  1. 18

  2. 16

  3. 10

  4. 3

  5. None of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In compound interest, if it doubles in 1 year, it becomes 2^n times in n years. We want 8 times, which is 2^3. So it takes 3 years.

AI explanation

Let the initial sum of money be P, which becomes 2 times P after one year, meaning the multiplication factor for any period of one year is 2. To find when the sum amounts to 8 times itself, we set the equation 2 raised to the power of n equals 8. Since 8 is 2 cubed, the sum will amount to 8 times itself in 3 years.

Keep practicing — related questions