suppose you owe £1000 on your credit card and the interest rate you are changed is 20% per year compounded annually.if you did not pay anything off, at this interest rate how many year would it take for the amount you owe to double
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Answer:
4 years
Step-by-step explanation:
As the interest which is charged is compounded annulally
Interest for 1st yr on 1000 @20℅ is 200
for 2nd yr interest is charged on 1200 which is 240 it means now the total amt is 1440
in 3rd yr the int charged on 1440 @20% is 288
& then the total amt is 1728
in 4th yr the int is charged on 1728 is 345.6 i.e 346 the total amt becomes 2074 which is double then the principal amt 1000
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