A sum of ₹12,000 deposited on compound interest becomes double after 5 years. After 20 years, it will become:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → ₹1,92,000
Under compound interest the amount is multiplied by the same factor in every equal period. The sum doubles in 5 years, so it doubles again in every further 5 years.
20 years is \(20\div5=4\) periods of 5 years
The amount is doubled 4 times: \(2^4=16\) times the sum
\(12000\times16=192000\), that is ₹1,92,000