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In how much time an investment of Rs. 50,000 at the rate of 5% simple interest would be doubled, if the…

In the first 10 years the simple interest is \(50000\times0.05\times10=25000\), and adding it makes the principal ₹75,000. A further ₹25,000 is needed to reach ₹1,00,000; on…

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In how much time an investment of Rs. 50,000 at the rate of 5% simple interest would be doubled, if the interest is added to the principal amount after every 10 years

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Correct answer A

In the first 10 years the simple interest is 50000×0.05×10=2500050000\times0.05\times10=25000, and adding it makes the principal ₹75,000. A further ₹25,000 is needed to reach ₹1,00,000; on ₹75,000 at 5% the yearly interest is 3750, so this takes 250003750=623\frac{25000}{3750}=6\frac{2}{3} years. The total time is 10+623=162310+6\frac{2}{3}=16\frac{2}{3} years, whereas without adding the interest after 10 years doubling would take 20 years.

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