A sum becomes 4 times its original value in 6 years under compound interest. In how many years will it become 16 times of the original amount?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 12 years.
A = P(1 + R/100)n
Let the original principal = P
4P = P(1 + R/100)6
⇒ (1 + R/100)6 = 4
Now, A = 16P
16P = P(1 + R/100)n
⇒ 16 = (1 + R/100)n
⇒ 42 = (1 + R/100)(6×2) = (1 + R/100)n
⇒ n = 6 × 2 = 12 years