A sum of money triples it self in 3 years at compound interest. In how many years will it becomes 9 times.
Answer & explanation
Correct answer: option 2
Compounding Annually, sum of money (P) becomes 3 times in 3 years
3P = P(1+ r/100)^3
Squaring on both sides,
9P2 = P2(1+ r/100)^2*3
9P = P(1+ r/100)^6
Comparing with the general equation of compound interest
Thus the amount in the condition becomes 9 times in 6 years
The correct answer is Option (2) → 6 years