Multiple choice

Ram takes money from the employees cooperative society at lower rate of interest and saves in a scheme, which gives him a compound interest of 20% compounded annually. The least number of complete years after which his sum will be more than doubled is:

  1. 2

  2. 4

  3. 6

  4. 8
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Using the compound interest formula A = P(1 + r/100)^n, we want A > 2P. (1 + 0.20)^n > 2, so (1.2)^n > 2. For n=3, 1.2^3 = 1.728. For n=4, 1.2^4 = 2.0736. Thus, 4 years are required.

AI explanation

We use the compound interest formula where the amount equals the principal multiplied by (1 + 20/100) raised to the power of the number of years. We need this multiplier, (1.2) raised to n, to be greater than 2. Testing the options, 1.2 cubed is 1.728, while 1.2 raised to the fourth power is 2.0736. Since 2.0736 is greater than 2, the least number of complete years required is 4.

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