Knowee
Questions
Features
Study Tools

A sum of money doubles itself in 5 years. In how many years will it become four-fold (if interest is compounded)?

Question

A sum of money doubles itself in 5 years. In how many years will it become four-fold (if interest is compounded)?

🧐 Not the exact question you are looking for?Go ask a question

Solution

This problem can be solved using the rule of 72, which is a simple way to determine how long an investment will take to double, given a fixed annual rate of interest.

  1. The rule of 72 states that the time required to double an investment with a certain annual interest rate is approximately 72 divided by that interest rate.

  2. In this case, the money doubles in 5 years. So, the interest rate is 72/5 = 14.4% per year.

  3. Now, we want to find out how long it will take for the money to become four-fold.

  4. Since the money doubles in 5 years, it will double again in another 5 years (because the rate of interest is compounded).

  5. Therefore, the money will become four-fold in 5 + 5 = 10 years.

So, the answer is 10 years.

This problem has been solved

Similar Questions

A sum of money doubles itself in 5 years at compound interest. In how many years will it become 8 times?

A sum of money doubles itself in 7 years. In how many years it becomes four fold?

A sum of money at compound interest doubles itself in 15 years. It will become eight times of itself in?Options45 years48 yearsNone of these54 years60 years

A certain sum lent under simple interest doubles itself in five years. After how many years will the sum become four times itself, if the rate of interest at which it is lent is increased by 5 percentage points?12162015

A sum of money will double itself in 4 years at simple interest with a yearly rate of ___________ %.Choices:- 20 25 30 35

1/3

Upgrade your grade with Knowee

Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.