Question

Find the rate at which a sum of money will double itself in 2 yrs if the interest is compounded annually...pls solve as soon as u can....pls

Answer 1

Given Time(n) = 2 years.

Let the sum/principal be p.

Given sum of money will double itself, A = 2p

Now,

We know that A = p(1 + r/100)^n

                        2p = p(1 + r/100)^2

                        2 =  (1 + r/100)^2

                      $\sqrt{2} = (1 + \frac{r}{100} )$

                     $\frac{r}{100} = \sqrt{2} - 1$

                     $r = 100 \sqrt{2} - 100$

                     $r = 100( \sqrt{2} - 1)$

                     $r = 41.42$


Therefore the rate = 41.42% (or) ~41.


Hope this helps!