If a sum of money doubles in 10 years at simple interest, what is the rate of in

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Question: If a sum of money doubles in 10 years at simple interest, what is the rate of interest?

Options:

Correct Answer: 5%

Solution:

If the amount doubles, SI = P. Rate = (SI / (P * t)) * 100 = (P / (P * 10)) * 100 = 10%

If a sum of money doubles in 10 years at simple interest, what is the rate of interest?

If a sum of money doubles in 10 years at simple interest, what is the rate of interest?

Step 1: Understand that if a sum of money doubles, the Simple Interest (SI) earned is equal to the principal amount (P).
Step 2: Write down the formula for Simple Interest: SI = P * r * t, where r is the rate of interest and t is the time in years.
Step 3: Since the amount doubles, we have SI = P. So, we can set up the equation: P = P * r * 10.
Step 4: Divide both sides of the equation by P (assuming P is not zero): 1 = r * 10.
Step 5: Solve for r by dividing both sides by 10: r = 1 / 10.
Step 6: Convert r into a percentage by multiplying by 100: r = (1 / 10) * 100 = 10%.

Simple Interest – Understanding how simple interest is calculated and its relationship with principal, time, and rate.
Doubling Principle – Recognizing that if a sum doubles, the simple interest earned equals the principal.