At what rate of interest per annum, the amount ` 10, 000/- will be doubled in 5 years, interest being compounded quarterly?
P = Po(1+r)^n
n = 4Comp./yr * 5yrs. = 20 Compounding
periods.
P = 10,000(1+r)^20 = $20,000
Divide both sides by 10,000:
(1+r)^20 = 2
Take Log of both sides:
20*Log(1+r) = Log 2
Divide both sides by 20:
Log(1+r) = 0.015051
1+r = 10^0.015051 = 1.035265
r = 1.035265-1 = 0.035265 = Quarterly % rate.
APR = 4 * 0.035265 = 0.141 = 14.1%.