Find the rate at which a sum of money will become four times the original amount in 2 years,

Question:

Find the rate at which a sum of money will become four times the original amount in 2 years, if the interest is compounded half-yearly.

Solution:

Let the rate percent per annum be $\mathrm{R}$.

Then,

$\mathrm{A}=\mathrm{P}(1+\mathrm{R})^{2 \mathrm{n}}$

$4 \mathrm{P}=\mathrm{P}\left(1+\frac{\mathrm{R}}{200}\right)^{4}$

$\left(1+\frac{\mathrm{R}}{200}\right)^{4}=4$

$\left(1+\frac{\mathrm{R}}{200}\right)=1.4142$

$\frac{\mathrm{R}}{200}=0.4142$

$\mathrm{R}=82.84$

Thus, the required rate is $82.84 \%$.

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