Multiple choice

If a money becomes three times its own in 8 years at compound interest, then in what time will it be 243 times its own?

  1. 38

  2. 35

  3. 45

  4. 40
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

If money becomes 3 times in 8 years at compound interest, then (1+r)^8 = 3, where r is the annual rate. We want the time t for money to become 243 times. Since 243 = 3^5, we have (1+r)^t = 3^5 = ((1+r)^8)^5. Therefore: (1+r)^t = (1+r)^40, which gives t = 40 years.

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