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Sum of money doubles in 5 years at compound interest. It will become 4 times in
A15 years
B20 years
C8 years
D10 years
Answer & Solution
Correct answer: D. 10 years
1. If P doubles in 5 years, then (1 + r)^5 = 2.
2. To become 4 times, we need (1 + r)^n = 4 = 2^2 = ((1 + r)^5)^2 = (1 + r)^10.
3. Equating exponents: n = 10.
4. So the sum becomes 4 times in 10 years.
_Source: ICAI BoS Foundation Paper 3, Ch 4 'Math of Finance', p.9_
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