A sum doubles itself in one year at a certain rate of interest, compounded annually. In how many years will a sum become six times itself under the same investment scheme?
I got confused in this simple problem because of two approaches I can think of -
First - Clearly rate of interest = 100%, So $$6P = P(1+1)^n$$ solving We get n = log6/log2, n = 2.58 Years
Second - At the end of 2 years Amount = 4P, now to convert 4P to 6P we need say x months, then $$2P=(4P*1*x)/12$$; x = 6 months, hence answer = 2.5 years
Why the difference?