Multiple choice

A sum of money doubles itself in 4 years at compound interest. It will amount to 8 times of itself at the same rate of interest in-

  1. 16 years

  2. 6 years

  3. 8 years

  4. 12 years
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

If money doubles in 4 years at compound interest, then 2x = x(1+r)^4, so (1+r)^4 = 2. For 8 times: 8x = x(1+r)^n. Since 8 = 2^3, we have 2^3 = ((1+r)^4)^3 = (1+r)^12. Therefore n = 12 years. Option C (8 years) is a common mistake using simple interest logic. Option B (6 years) and A (16 years) don't satisfy the exponential relationship.

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