Multiple choice

At what rate per cent compound interest does a sum of money become four fold in $2$ years?

  1. $25$%
  2. $50$%
  3. $100$%
  4. $10$%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

For compound interest, A = P(1 + r/100)^n. Here A = 4P, n = 2. 4P = P(1 + r/100)^2. 4 = (1 + r/100)^2. Taking the square root, 2 = 1 + r/100. r/100 = 1, so r = 100%.

AI explanation

Using the compound interest formula where Amount equals P multiplied by the quantity (1 + R divided by 100) raised to the power of n, we set the Amount to 4P for 2 years. This gives the equation 4 equaling the quantity (1 + R divided by 100) squared. Taking the square root of both sides results in 2 equaling 1 plus R divided by 100, meaning R equals 100. The result is 100 percent.

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