Ram deposits Rs P with a bank at r compound interest and sees it reach Rs 16P in 20 years If he had ...........

Quant (SSC) Compound Interest

Ram deposits Rs. P with a bank at r% compound interest and sees it reach Rs.16P in 20 years. If he had invested the same amount at r% simple interest for 20 years, what would be the amount?

Between Rs. 2P and 2.5P

Between Rs. 2.5P and 3P

Between 3P and 3.5P

Between 3.5P and 4P

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Explanation:

P (1 + r)²⁰ = 16P
(1 + r)²⁰ = 16
((1 + r)¹⁰)² = 4²
(1 + r)¹⁰ = 4
((1 + r)⁵)² = 2²
((1 + r)⁵) = 2
In order for the money to double, the approximate formula for r = 72/n = 14.4% .
Rate of interest should be roughly 14 – 15%
If he had invested this in simple interest,
A = P + P * 20 *(14 to 15 %)/100 = 3.8P to 4P