Multiple choice

If a sum of money compound annually amounts of thrice itself in 3 years. In how many years will it become 9 times itself.

  1. 6

  2. 8

  3. 10

  4. 12

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A Correct answer
Explanation

If the amount triples in 3 years with annual compounding, then (1+r)³ = 3. To become 9 times, we need (1+r)ⁿ = 9. Since 9 = 3², we have (1+r)ⁿ = (1+r)⁶, giving n = 6 years. The doubling of the exponent (from 3 to 6) reflects the squaring relationship.

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