Multiple choice

A company publishes to its customers that at a certain compound interest rate, a sum of money deposited by anyone will become 8 times in 3 years. If the same amount is deposited at the same compound rate of interest, then in how many years will it become 16 times?

  1. 4 years

  2. 3 years

  3. 3.5 years

  4. 4.5 years
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A Correct answer
AI explanation

The problem states that a sum becomes 8 times in 3 years, which means according to the compound interest formula, (1 + R/100)^3 = 8, so the common ratio (1 + R/100) is the cube root of 8, which is 2. To find when it becomes 16 times, we set up the equation 2^n = 16. Since 2^4 = 16, it will take 4 years.

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