A sum of money doubles itself in 10 years .the number of years it woul...
Understanding the Concept:
When a sum of money doubles itself in a certain number of years, it means that the amount becomes twice the original value in that time period. Similarly, when a sum of money triples itself, it means the amount becomes three times the original value.
Calculating the Time to Triple:
To find out the number of years it would take for the money to triple itself, we can use the concept of compound interest.
Let's assume the original principal amount is P. If the money doubles itself in 10 years, the amount after 10 years will be 2P.
Now, for the money to triple itself, we need to find the time it takes for the amount to grow from 2P to 3P. This can be calculated using the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = Final amount
P = Principal amount
r = Rate of interest
n = Number of times interest is compounded per year
t = Number of years
Since the amount doubles itself in 10 years, we know that A = 2P, t = 10 years, and n = 1 (compounded annually).
Now, we need to find the time it takes for the amount to reach 3P:
3P = P(1 + r/1)^(1*t)
3 = (1 + r)^10
By solving this equation, we can find the value of r, which will give us the number of years it takes for the money to triple itself.
Conclusion:
By using the compound interest formula and solving the above equation, we can determine the number of years it would take for a sum of money to triple itself, given that it doubles itself in 10 years. This calculation helps in understanding the growth of an investment over time and can be useful for financial planning and decision-making.
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.