Question

At 20% per annum rate, an amount is doubled in approximately in ______ years at compound interest

• A. 5
• B. 2
• C. 4
• D. 3

Answer 1

Answer:

C. 4

Let's start with a Principal amount of ₹100. For the money to double, it needs to reach ₹200.

* Year 1:

* Interest = 20% of ₹100 = ₹20

* Total Amount = $100 + 20 =$ ₹120

* Year 2:

* Interest = 20% of ₹120 = ₹24

* Total Amount = $120 + 24 =$ ₹144

* Year 3:

* Interest = 20% of ₹144 = ₹28.80

* Total Amount = $144 + 28.80 =$ ₹172.80

* Year 4:

* Interest = 20% of ₹172.80 = ₹34.56

* Total Amount = $172.80 + 34.56 =$ ₹207.36

## Conclusion

By the end of 3 years, the money is only ₹172.80 (not yet doubled). By the end of 4 years, the money becomes ₹207.36 (just past doubled).

Therefore, the money doubles in approximately 4 years (or precisely 3.8 years).