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# If a sum of money grows to 144/121 times when invested for

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VP
Joined: 30 Sep 2004
Posts: 1480
Location: Germany
If a sum of money grows to 144/121 times when invested for [#permalink]

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11 May 2005, 12:54
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If a sum of money grows to 144/121 times when invested for two years in a scheme where interest is compounded annually, how long will the same sum of money take to treble if invested at the same rate of interest in a scheme where interest is computed using simple interest method?

(1) 9 years
(2) 22 years
(3) 18 years
(4) 33 years
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Senior Manager
Joined: 15 Mar 2005
Posts: 418
Location: Phoenix
Re: PS - compounded annually [#permalink]

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11 May 2005, 15:12
Annual Growth = sqrt(144/121) = 12/11 =>Rate of Interest = 100/11%
Since I = PxRxT/100,
2P = Px100xT/1100 =>T=2200/100 = 22yrs
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VP
Joined: 25 Nov 2004
Posts: 1483
Re: PS - compounded annually [#permalink]

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11 May 2005, 19:00
it is another nice problem.
rate of interest = sqrt(144/121)=12/11=1.0909 or 9.09% or approx 9.1%
x + (0.09x) n yrs = 3x
n = 2x/(0.09x) = 22 years approx.
Re: PS - compounded annually   [#permalink] 11 May 2005, 19:00
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