Multiple choice

A sum of Rs. 2000 amounts to Rs. 4000 in two years at compound interest. In how many years does the same amount become Rs. 8000?

  1. 2

  2. 4

  3. 6

  4. 8
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Amount doubles in 2 years. In compound interest, if A = P(1+r)^n, then 2P = P(1+r)^2, so (1+r)^2 = 2. To get 8000 (which is 4 times 2000), we need 4P = P(1+r)^n, so (1+r)^n = 4. Since (1+r)^2 = 2, (1+r)^4 = 2^2 = 4. So n = 4 years.

AI explanation

Since the sum grows from Rs. 2000 to Rs. 4000 in two years, the amount doubles in two years. Therefore, Rs. 4000 will double to Rs. 8000 in the next two years. The total time to reach Rs. 8000 from the original Rs. 2000 is 4 years.

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