Question

Find the minimum number of complete years in which a sum of money put at 20% compound interest will be more than doubled.

Answer 1

Let the principal be Rs. $100$

Interest in $1$ year at the rate of $20\%=100\times \frac{20}{100}=20$

Interest in $2$ years at the rate of $20\%=(100+20)\times \frac{20}{100}=120\times \frac{20}{100}=24$

Interest in $3$ years at the rate of $20\%=(120+24)\times \frac{20}{100}=144\times \frac{20}{100}=28.8$

Interest in $4$ years at the rate of $20\%=(144+28.8)\times \frac{20}{100}=172.8\times \frac{20}{100}=34.56$

For Rs. $100$, the rate of interest in $4$ years is $107.36$ Rs.

Hence, compound interest will be more than doubled in $4$ years.