Question

A sum becomes five times of itself in 8 years at simple interest. What is the rate of interest per annum?

• A. 37.5%
• B. 25%
• C. 62.5%
• D. 50%

Answer 1

Answer:

D. 50%

Solution:

Given:

The sum becomes five times itself

Time = 8 years

Formula Used:

Simple interest $=\frac{ (P\times{R}\times{T})}{100}$

P → Principal

R →Rate of interest

T →Time 

Calculation:

Let the sum of money be P

After 8 years it becomes 5 times.

The simple interest = 5P – P = 4P

$4P=\frac{(P\times{R}\times{8})}{100}$

$R = \frac{400}{8}$ = 50%

∴The Rate of interest per annum is 50%