A sum of money at compound interest doubles itself in 12 years. It will become 16 times of itself in:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 48 years
At compound interest the amount is multiplied by the same factor in every equal period. Here the factor for every 12 years is 2, so the money keeps doubling every 12 years: 2 times after 12 years, 4 times after 24, 8 times after 36 and so on.
16 times the sum is \(2\times2\times2\times2=2^{4}\), that is, the money must double 4 times
Four periods of 12 years each: \(4\times12=48\) years