Multiple choice

At what rate of annual simple interest, sum will amount to five times in $16$ years?

  1. $15 \%$
  2. $20 \%$
  3. $25 \%$
  4. $22.5 \%$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Simple interest formula: A = P + SI = P(1 + RT/100). If A = 5P, then 5P = P(1 + R*16/100), so 4 = 16R/100, R = 400/16 = 25%.

AI explanation

If a sum becomes five times in 16 years, the total simple interest earned is 4 times the principal. Using the formula R = (100 times SI) divided by (P times T), we substitute SI = 4P to get R = (100 times 4P) divided by (P times 16). The principal P cancels out, leaving R = 400 divided by 16. Therefore, the annual rate of simple interest is 25%.

Keep practicing — related questions