Question

5. Kevin wants to deposit some money in a bank. He surveys various banks and finds that Bank A promises
to double his money in 6 years, Bank B promises to increase his money 1 times in 23 years and Bank C
promises to treble his money in 8 years. Which bank is giving the highest rate of interest?
6. A sum of money doubles itself in 5 years. How much time it will take for it to quadruple at the same rate of interes?


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Answer 1

Answer:

Step-by-step explanation:

he simple interest equation looks something like this:

V(t) = V(0)*(1 + r*t)

where:

V(t) = value of the money at time t

V(0) = initial value of money/value of money at time t=0

r = the interest rate

t = time

Let the sum of money be = X; then if the sum of money double itself in 5 years, we have:

2X = X*(1 + 5r)

we can cross X on both left side and right side, and then solving for “r”, we have r = 20%

Then, for the second part of the question, let the value of money be = Y at time t=0, and using the r=20% we solve from above, we have:

4Y = Y*(1 + 20%*t)

we can cross Y from both sides of the equation, and then solving for “t”, we have that t = 15 years