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  4. A certain sum becomes 8 times in 3 years at compound interest, compounded annually. Find the rate of interest.

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Q. A certain sum becomes 8 times in 3 years at compound interest, compounded annually. Find the rate of interest.

Simple Interest and Compound Interest

Solution:

$A=P(1+\frac{r}{100})^t $
$ 8 P=P(1+\frac{r}{100})^3 $
$ \sqrt[3]{8}=1+\frac{r}{100} $
$ 2=1+\frac{r}{100} $
$ 1 \times 100=r $
$ r=100 \% pa $