A sum of money doubles itself in 10 years at simple interest. What is the rate o

A sum of money doubles itself in 10 years at simple interest. What is the rate of interest?

A sum of money doubles itself in 10 years at simple interest. What is the rate of interest?

Step 1: Understand that if a sum of money doubles, the interest earned is equal to the original amount (Principal).
Step 2: Let the Principal amount be represented as 'P'. If it doubles, the total amount after 10 years is '2P'.
Step 3: Calculate the Interest earned: Interest = Total Amount - Principal = 2P - P = P.
Step 4: Use the formula for simple interest: Interest = Principal * Rate * Time.
Step 5: Substitute the known values into the formula: P = P * Rate * 10.
Step 6: Simplify the equation: 1 = Rate * 10.
Step 7: Solve for Rate: Rate = 1 / 10 = 0.1.
Step 8: Convert the rate to a percentage: Rate = 0.1 * 100 = 10%.

Simple Interest – Understanding how simple interest is calculated and how it relates to the principal amount over time.
Doubling Time – Recognizing that if a sum of money doubles, the interest earned equals the principal.
Rate of Interest Calculation – Applying the formula for calculating the rate of interest based on interest earned, principal, and time.