Multiple choice

Certain sum doubled in 2 years at simple interest. How many times will it become in 2 years at compound interest, if the rate is same?

  1. 3.61

  2. 3.24

  3. 2.89

  4. 2.25

  5. 2.56
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Simple interest doubling in 2 years implies the rate is 50% per year. Using the compound interest formula A = P(1 + r/100)^t, where r = 50 and t = 2, the amount becomes P(1 + 0.5)^2 = 2.25P.

AI explanation

Since the sum doubles in 2 years under simple interest, the interest earned equals the principal, meaning the rate is 50 percent per annum. For compound interest, the amount after 2 years is calculated using the formula Amount = Principal multiplied by (1 + R/100) raised to the power of the time. Substituting the values gives Amount = Principal multiplied by (1 + 50/100) squared, which is Principal multiplied by 1.5 squared. This calculates to Principal multiplied by 2.25, meaning the sum becomes 2.25 times itself.

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