A sum of money on compound interest becomes double of itself in 3 years. How many years will it take for the amount to become eight times of itself at the same rate of interest.?
- AOption (a)
7
- BOption (b)
9
- COption (c)
5
- DOption (d)
8
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Correct answer
9
Why this answer is correct
Given:
A sum of money on compound interest becomes double of itself in 3 years.
Formula Used:
If a sum of money becomes n times in T years at compound interest, then to find the number of years it will take to become
\(T_m = T \times \frac{\log m}{\log n}\)
Calculation:
Here, n = 2 , T = 3 years, and m = 8 .
Using the formula:
\(T_m = 3 \times \frac{\log 8}{\log 2}\)
We know that \(\log 8 = \log (2^3) = 3 \log 2 . So,\)
\(\frac{\log 8}{\log 2} = \frac{3 \log 2}{\log 2} = 3 .\)
Therefore,
\(T_m = 3 \times 3 = 9 years\).
The correct answer is option 2.