Multiple choice

How long (years) will it take a sum of money invested at $5\%$ per annum at simple interest to increase its value to $40\%$?

  1. $5$
  2. $6$
  3. $7$
  4. $8$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Simple interest is calculated as I = P * R * T / 100. To increase the value by 40%, the interest must be 0.4P. Setting 0.4P = P * 5 * T / 100, we solve for T: 0.4 = 0.05T, which gives T = 8 years.

AI explanation

Using the Simple Interest formula, the interest earned is 40 percent of the principal, so we have (40/100) times P equals (5 times P times T) divided by 100. Simplifying this gives 40 equals 5 times T, which means T equals 8 years. The time taken is 8 years.

Keep practicing — related questions