Question

At what rate percent per annum of simple interest will a certain sum of money become double in 5 years?

• A. 20%
• B. 25%
• C. 30%
• D. 10%

Answer 1

Answer:

A. 20%

Solution:

Given:

If a sum doubles itself in 5 years by simple interest.

Time (T) = 5 years

Formula used:

S.I. = $\frac{(P\times{R}\times{T})}{100}$

Where,

S.I. → Simple Interest

P → Principal

R → Rate 

T → Time

Calculations:

Let P be the principal amount and R be the rate of interest.

According to the question,

$2P = P + \frac{(P\times{R}\times{T})}{100}$

⇒ $P =\frac{(P\times{R}\times{5})}{100}$

⇒ $1=\frac{(R\times{5})}{100}$

⇒ R = 20% 

∴  The rate of simple interest p.a. is 20%.