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Find what is that first years in which a sum of money will become more than double in amount if put out at compound interest at the rate of 10% per annum?

Correct Answer: 8th years

Explanation:

Here, P(1 + 10/100)t > 2P
⇒ (11/10)t > 2
When t = 8 → (11/10)8 = 2.14358
t =7 → (11/10)7 = 1.9487
By trial, [11 x 11 x 11 x 11 x 11 x 11 x 11 x 11] / [10 x 10 x 10 x 10 x 10 x 10 x 10 x 10] >2
Hence, the first years in which sum of money will become more than double in amount is 8th year


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