Question

How long will it take Birr 500

Answer 1

It would take 25 years for Birr 500 to quadruple if invested at a rate of 12% simple interest per annum.

Simple interest formula

Using the simple interest formula A = P(1 + rt) where

• P = princial amount = Birr 500,
• A = final amount = 4P (since it is quadrupled),
• r = rate = 12% = 12/100 = 0.12 and
• t = time to quadruple

Finding the time it takes to quadruple

Since we require t, making t subject of the formula, we have

t = [(A/P) - 1]/r

Substituting the values of the variables into the equation, we have

t = [(A/P) - 1]/r

t = [(4P/P) - 1]/0.12

t = [4 - 1]/0.12

t = 3/0.12

t = 25 years

So, it would take 25 years for Birr 500 to quadruple if invested at a rate of 12% simple interest per annum.

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