Question

A sum of money is invested at a rate of 40% per annum. Find the minimum
number of years after which it will become double if the interest is compounded
Annually.

Answer 1

Answer:

2 years 19 days.

In 2 years, 100 will become 196 at 40% interest compounded annually.

On 196, interest at 40% for 1 day works out = (196 x 40%)/365 = 0.2148.

Interest for 19 days will be = 0.2148x19 = 4.08

So, after 2 years & 19 days, at 40% interest compounded annually, 100 will be 200.08,

So the minimum number of years for the money becoming double is 3 years;

But the minimum period required for the money becoming double is 2 years 19 days.

Step-by-step explanation:

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