If a sum of money doubles itself in 5 years at simple interest, what is the rate

₹0.0

Question: If a sum of money doubles itself in 5 years at simple interest, what is the rate of interest?

Options:

Correct Answer: 10%

Solution:

Rate = (100 * Principal) / (Principal * Time) = (100 * 1) / (1 * 5) = 20%. Therefore, the rate of interest is 20%.

If a sum of money doubles itself in 5 years at simple interest, what is the rate of interest?

If a sum of money doubles itself in 5 years at simple interest, what is the rate of interest?

Step 1: Understand that the money doubles in 5 years. This means if you start with a Principal amount (let's say 1 unit of money), after 5 years, you will have 2 units of money.
Step 2: In simple interest, the formula for the total amount (A) after time (T) is: A = Principal + Interest.
Step 3: The Interest can be calculated using the formula: Interest = Principal * Rate * Time.
Step 4: Since the money doubles, we can say: 2 = 1 + (1 * Rate * 5).
Step 5: Simplify the equation: 2 = 1 + 5 * Rate.
Step 6: Subtract 1 from both sides: 1 = 5 * Rate.
Step 7: Divide both sides by 5 to find Rate: Rate = 1 / 5.
Step 8: Convert Rate to a percentage: Rate = (1 / 5) * 100 = 20%.
Step 9: Therefore, the rate of interest is 20%.

Simple Interest – Understanding how simple interest is calculated and the relationship between principal, rate, and time.