have you any shortcut trick to solve this question i.e. a sum of money double itself so compound interest in 10 year in how many years Will it become eight times . Related: CA Foundation Maths - Calculator Short tricks for TVM, Annuity, Compound Interest, PV,FV?

Question

have you any shortcut trick to solve this question i.e.   a sum of money double itself so compound interest in 10 year in how many years Will it become eight times . Related:  CA Foundation Maths - Calculator Short tricks for TVM, Annuity, Compound Interest, PV,FV?

Answer

Shortcut Trick for Compound Interest:

To solve the given question, we can use the shortcut trick for compound interest which is based on the concept of Rule of 72. According to this rule, if we divide the number 72 by the rate of interest, we get the approximate number of years in which the principal amount will double.

For example, if the rate of interest is 10%, then the principal amount will double in approximately 7.2 years (72/10 = 7.2).

Using this shortcut trick, we can solve the given question as follows:

Given, the sum of money doubles itself in 10 years.

So, the rate of interest is approximately 7.2% (72/10 = 7.2).

Now, we need to find the number of years in which the sum of money will become eight times.

So, we need to find the number of years 't' such that:

(1 + 7.2/100)^t = 8

Taking logarithm on both sides, we get:

t * log(1 + 7.2/100) = log 8

t = log 8 / log(1 + 7.2/100)

Using a calculator, we get:

t ≈ 46.66 years

Therefore, the sum of money will become eight times in approximately 46.66 years.

Explanation:

The above shortcut trick is based on the concept of compound interest and the rule of 72. It is a quick and easy way to find the approximate time period in which the principal amount will double or become a certain multiple of itself. However, it is important to note that this shortcut trick gives only an approximate answer and may not be accurate in all cases.

In order to get a more accurate answer, we need to use the formula for compound interest and solve the equation using logarithms. This requires a good understanding of the underlying concepts and some mathematical skills. Therefore, it is important to practice and learn the concepts thoroughly in order to solve such problems easily and accurately.

Answer

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