Multiple choice

At what rate of annual simple interest, sum will amount to five times in $40$ years?

  1. $5$%
  2. $25$%
  3. $50$%
  4. $10$%
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Simple interest formula: A = P + SI = P + P*R*T/100. Amount is 5 times the sum, so A = 5P. 5P = P + P*R*40/100. 4P = 0.4*P*R. R = 4/0.4 = 10%.

AI explanation

Let the principal be P, meaning the interest earned to become five times the sum is 4P. Using the simple interest formula R = (100 × SI) / (P × T), we calculate R = (100 × 4P) / (P × 40) = 10. The required rate is 10%.

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