Multiple choice

A sum becomes double in 10 years, then annual rate of simple interest is

  1. 8%

  2. 5%

  3. 10%

  4. 20%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

If a sum doubles, the interest earned equals the principal. Using SI = (P*R*T)/100, we have P = (P*R*10)/100, which simplifies to 1 = R/10, so R = 10%.

AI explanation

If a sum doubles in 10 years, the interest earned equals the principal, meaning Simple Interest equals Principal. Using the formula Simple Interest equals (Principal multiplied by Rate multiplied by Time) divided by 100, we can substitute Principal for Simple Interest and cancel it from both sides. This leaves 1 equals (Rate multiplied by 10) divided by 100. Solving for the Rate gives 10 percent.

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