A certain sum of money amounts to 3 times of itself in 13 years when interest is compounded annually at a certain rate of interest per annum. In how many years will the initial sum amount to 9 times of itself at the same rate of interest per annum, also compounded annually?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 26 years
A certain sum of money amounts to 3 times itself in 13 years when interest is
compounded annually at a certain rate of interest per annum.
P(1 + R/100)13 = 3P
(1 + R/100)13= 3 ....Eq.(i)
Let's assume that in 't years will the initial sum amount to 9 times of itself at the same rate
of interest per annum, also compounded annually.
P(1+ R/100)t = 9P
(1+ R/100)t = 9
(1+ R/100)t = 3² ....Eq.(ii)
So by comparing Eq (i) and Eq (ii), we can say that
t =13 x 2
= 26 years