Multiple choice

A sum of money becomes double in 3 years at compound interest, compounded annually. In how much time will it become 4 times of itself at the same rate of compound interest?

  1. 8 years

  2. 9 years

  3. 6 years

  4. 7 years

  5. Cannot be determined
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In compound interest, if a sum becomes A times in T years, it becomes A^n times in nT years. Here, it becomes 2 times in 3 years. To become 4 times (2^2), it takes 2 * 3 = 6 years.

AI explanation

When a sum doubles in 3 years, it grows by a factor of 2 every 3 years. Since compound interest applies to the accumulated amount, multiplying by another factor of 2 to reach four times the original amount requires exactly one more doubling period. This means it takes 3 years plus 3 years, resulting in a total of 6 years.

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