CA Foundation · Quantitative Aptitude · Mathematics of Finance
A sum of money doubles itself in 10 years at simple interest. In how many years will it become four times itself at the same rate?
It will become four times in 30 years. Doubling in 10 years at simple interest means interest equal to the principal accrues every 10 years, a rate of 10%. Quadrupling needs interest of three times the principal, which takes three such periods.
- A20 years
- B25 years
- C30 yearsCorrect
- D40 years
Explanation
Doubling in 10 years means interest equals the principal in 10 years, so the rate is 10% p.a. To become four times, interest must equal 3 times the principal, which needs 3 × 10 = 30 years. 20 years is wrong because it assumes four times needs only double the doubling time.
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