InvestorQ : a certain amount double in 5 years, when invested in simple interest.in how many years will it become 8 times?
monjit phukan made post

a certain amount double in 5 years, when invested in simple interest.in how many years will it become 8 times?

Answer
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Dhwani Mehta answered.
1 year ago


Let’s suppose the amount invested = Rs.10,000, Time= 5 years and it doubles in the given time, which means the interest rate is 20% per annum.

So, if you’re investing Rs.10,000 at year 1, you will end up receiving Rs.20,000 at the end of year 5.
The formula to calculate above is :
A=P(1+RT)
In your case, the amount you want to receive is Rs. 80,000 (10,000*8); 8 times of the principal.
Hence, using the above formula,
80,000 =10,000{1+(20%)*t}
This means,
T = (1/R)(A/P-1)
= (1/20%)(80000/10000-1)
=35 years

Hence, principally invested at the rate of 20%, would be 8 times in 35 years, if the interest received is @20% per annum.
While, if you receive interest on a compounding basis, the same amount, at the same rate of interest could be received in 12 years on an average, if the compounding is done annually.