(CSAT-Aptirudeat) 8% annual compound interest rate, a Government savings certificate doubles the invested money in approximate 9 years. If finance minister wants to get the money doubled in only 4 years, by approximately what percentage he should increase this scheme’s interest rate from its present rate?

The correct answer is A. 45%.

To double the money in 9 years, the interest rate needs to be 8%. To double the money in 4 years, the interest rate needs to be 16%. This is an increase of 8%.

To calculate the interest rate, we can use the following formula:

$A = P(1 + r/n)^nt$

where:

• $A$ is the final amount
• $P$ is the principal amount
• $r$ is the interest rate
• $n$ is the number of times the interest is compounded per year
• $t$ is the number of years

In this case, we know that $P = 1$, $A = 2$, $t = 9$, and $n = 1$. We can solve for $r$ to get:

$r = \frac{ln(2)}{9}$

$r \approx 8\%$

To double the money in 4 years, we can solve for $r$ in the following equation:

$A = P(1 + r/n)^nt$

where:

• $A = 2$
• $P = 1$
• $t = 4$
• $n = 1$

$r = \frac{ln(2)}{4}$

$r \approx 16\%$

This is an increase of 8% from the current interest rate of 8%.