How many years will it take for a sum of money to grow 4 times at the effective rate of 6 % ?
[Use log 2 =0.3010, log(1.06)=0.0253]
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 23.78
Amount = $P(1+r)^t$
$⇒4P=P(1.06)^t$
$⇒4=(1.06)^t$
$⇒\log 4=t\log (1.06)$
$⇒t=\frac{\log 4}{\log (1.06)}≃23.78\,years$