Multiple choice

An amount of money increased by 87.5% after a time period of 7 years at simple interest. Find the rate of interest at which the money was invested.

  1. 10.00%

  2. 12.50%

  3. 15.00%

  4. 17.50%

  5. 20.00%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Simple interest SI = P * r * t / 100. Increase of 87.5% means SI = 0.875 * P. 0.875 * P = P * r * 7 / 100. r = 87.5 / 7 = 12.5%.

AI explanation

An increase of 87.5% means the interest earned is 87.5% of the principal, so for a period of 7 years, the simple interest is 87.5P = (P * R * 7) / 100. Simplifying this equation gives R = 8750 / 700, which results in a rate of 12.50%.

Keep practicing — related questions