model 2 at ci sum becomes ‘n’ times after ‘t’ years Section-Wise Topic Notes With Detailed Explanation And Example Questions

MOST IMPORTANT quantitative aptitude - 6 EXERCISES

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The following question based on compound interest topic of quantitative aptitude

Questions : If a sum of money compounded annually becomes 1.44 times of itself in 2 years, then the rate of interest per annum is

(a) 20%

(b) 25%

(c) 21%

(d) 22%

The correct answers to the above question in:

Answer: (a)

A = P$(1 + R/100)^T$

1.44P = P$(1 + R/100)^2$

$(1.2)^2 = (1 + R/100)^2$

$1 + R/100$ = 1.2

R = 0.2 × 100 = 20%

Using Rule 8,

Here, n = 1.44, t = 2 years

R% = $(n^{1/6} - 1) × 100%$

= $[(1.44)^{1/2} - 1] × 100%$

= [(1.2) - 1] × 100%

= 0.2 × 100% ⇒ R% = 20%

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Read more ci becomes n times after t years Based Quantitative Aptitude Questions and Answers

Question : 1

A sum of money invested at compound interest doubles itself in 6 years. At the same rate of interest it will amount to eight times of itself in :

a) 10 years

b) 15 years

c) 18 years

d) 12 years

Answer: (c)

Let the sum be x. Then,

$2x = x(1 + r/100)^6$

2 = $(1 + r/100)^6$

Cubing both sides,

8 =$((1 + r/100)^6)^3$

8 = $(1 + r/100)^18$

$8x = x(1 + r/100)^18$

The sum will be 8 times in 18 years.

i.e., Time = 18 years

Using Rule 5,

Here, m = 2, t = 6 years

It will becomes 8 times of itself

= $2^3$ times of it self

in t × n years = 6 × 3 = 18 years

Question : 2

If the amount is 2.25 times of the sum after 2 years at compound interest (compound annually), the rate of interest per annum is :

a) 50%

b) 25%

c) 45%

d) 30%

Answer: (a)

Suppose P = Rs.100

and amount A = Rs.225

A = P$(1 + r/100)^t$

or 225 = $100(1 + r/100)^2$

or $225/100 = [1 + r/100]^2$

or 1 + $r/100 = 15/10$

or ${100 + r}/100 = 15/10$

or 100 + r = 150

or r = 50%

Using Rule 8,
If a sum becomes 'n' times of itself in 't' years on compound interest, then R% = $[n^{1/t} - 1] × 100%$

Here, n = 2.25, t = 2 years

R% = $(n{1/t} - 1) × 100%$

R% = $[(2.25)^{1/2} - 1]$ × 100%

= [1.5 - 1] × 100%

= 0.5 × 100% = 50%

Question : 3

A sum of Rs.12,000, deposited at compound interest becomes double after 5 years. How much will it be after 20 years ?

a) Rs.1,92,000

b) Rs.1,44,000

c) Rs.1,50,000

d) Rs.1,20,000

Answer: (a)

A = P$(1 + R/100)^T$

24000 = 12000$(1 + R/100)^5$

2 = $(1 + R/100)^5$

$2^4 = (1 + R/100)^20$

i.e. The sum amounts to Rs.192000 after 20 years.

Using Rule 11,
A certain sum at C.I. becomes x times in $n_1$ year and y times in $n_2$ years then $x^{1/n_1} = y^{1/n_2}$

Here, x = 2, $n_1 = 5, y = ?, n_2$ = 20

$x^{1/n_1} = y^{1/n}$

$2^{1/5} = y^{1/20}$

$y = (2^{1/5})^20$

$y = 2^4 ⇒ y$ = 16 times

Sum = 16 × 12000 = Rs.1,92,000

Question : 4

A sum of money placed at compound interest doubles itself in 4 years. In how many years will it amount to four times itself ?

a) 16 years

b) 12 years

c) 8 years

d) 13 years

Answer: (c)

A = P$(1 + R/100)^T$

Let P be Rs.1, then A = Rs.2

2 = 1$(1 + R/100)^4$

$2^2 = (1 + R/100)^8$

Time = 8 years

Using Rule 11,

Here, $x = 2, n_1 = 4, y = 4, n_2$ = ?

Using $x^{1/n_1} = y^{1/n_2}$

$(2)^{1/4} = (4)^{1/n_2}$

$(2)^{1/4} = (2^2)^{1/n_2}$

$2^{1/4} = 2^{1/n_2}$

$1/4 = 2/n_2$

$n_2$ = 8 years

Question : 5

A sum of money placed at compound interest doubles itself in 5 years. In how many years, it would amount to eight times of itself at the same rate of interest ?

a) 20 years

b) 10 years

c) 7 years

d) 15 years

Answer: (d)

Let the Principal be P and rate of interest be r%.

2 P = P$(1 + r/100)^2$

2 = $(1 + r/100)^5$ ...(i)

On cubing both sides,

8 = $(1 + r/100)^15$

Time = 15 years

Using Rule 5,

Here, m = 2, t = 5 years

It becomes 8 times = $2^3$ times

in t × n = 5 × 3 = 15 years

Question : 6

A sum of money becomes eight times in 3 years, if the rate is compounded annually. In how much time will the same amount at the same compound rate become sixteen times?

a) 5 years

b) 6 years

c) 8 years

d) 4 years

Answer: (d)

Let the principal be Rs.1.

A = P$(1 + R/100)^T$

8 = 1$(1 + R/100)^3$

$2^3 = 1(1 + R/100)^3$

2 = 1$(1 + R/100)^1$

$2^4 = (1 + R/100)^4$

Time = 4 years

Using Rule 11,

Here, $x = 8, n_1 = 3, y = 16, n_2$ = ?

Using $x^{1/n_1} = y^{1/n_2}$

$(8)^{1/3} = (16)^{1/n_2}$

$(2^3)^{1/3} = (2^4)^{1/n_2}$

$2^1 = 2^{4/n_2}$

1= $4/n_2$

$n_2$ = 4 years

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