Question

Q:4 A sum of money becomes 4 times itself in 2 years ( if interest is compounded annually). Find the rate of percent per annum. *
​

Answer 1

Answer:

The first answer by Sateesh Kumar is correct. I will try to explain it differently

At 100% rate of interest, the Principal doubles itself in one year. Since it is compound interest, the Principal for the second year would be 2P. This again doubles itself in another year because Interest rate is 100%.

So at the end of two years it becomes 4 P.

Hence at an interest rate of 100% , the sum of money becomes 4 times itself.