A sum of money placed at compound interest becomes double of itself in 4 years. In how many years will it become 8 times of itself? MCQ with Answer and Explanation

Question

A sum of money placed at compound interest becomes double of itself in 4 years. In how many years will it become 8 times of itself?

A. 16 years

B. 8 years

C. 12 years

D. 20 years

Answer: Option C

Solution (By JKSSB Mock Tests)

The sum becomes 2^1 times in 4 years. It will become 8 (2^3) times in 3 * 4 = 12 years.

This question belongs to: Maths Compound Interest

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Question #1

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A sum of money at compound interest becomes Rs. 8820 in 2 years and Rs. 9261 in 3 years. Find the rate.

A. 6%

B. 3%

C. 5%

D. 4%

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Correct Answer: Option C

Explanation:
Rate = (9261/8820 − 1) × 100 = (1.05 − 1)×100 = 5%.

This question belongs to: Maths Compound Interest

Question #2

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At what rate of compound interest will Rs. 2000 amount to Rs. 2205 in 2 years?

A. 5%

B. 6%

C. 4%

D. 7%

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Correct Answer: Option A

Explanation:
2000(1+r)² = 2205 ⇒ (1+r)² = 1.1025 = (1.05)² ⇒ r = 5%.

This question belongs to: Maths Compound Interest

Question #3

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A sum of money yields a compound interest of Rs. 205 in 2 years at 5% per annum. Find the principal sum.

A. Rs. 1800

B. Rs. 2400

C. Rs. 2200

D. Rs. 2000

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Correct Answer: Option D

Explanation:
Effective rate of compound interest for 2 years at 5% = 5 + 5 + (55)/100 = 10.25%. Given 10.25% of P = 205 => P = 205 / 0.1025 = Rs. 2000.

This question belongs to: Maths Compound Interest

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