Question

A sum of money becomes sixteen times in four years. What is the rate of interest compounded annually?​

Answer 1

Answer:

400% this is because if

1 rupee becomes 4 ruppes in 1 year so in the same way the money becomes 4 times in 4 years with 400 percent

Answer 2

Let the required rate of interest be R.

Consider, the principal be P for time n years.

After 4 years, the amount is 16 times the principal. Here,

n = 4 years

Amount = 16 P

We know that,

Amount = P(1 + R/100)^n

16P = P(100 + R/100)

2^4 = (100 + R/100)^4

On cancelling power 4 both sides,

2 = 100 + R/100

On cross-multiplying both sides -

R + 100 = 200

R = 100%