Multiple choice

A certain sum of money on simple interest becomes 5 times its original value in 20 years. Find the rate of interest.

  1. 20%

  2. 25%

  3. 30%

  4. 35%
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Simple interest formula: SI = P * R * T / 100. Amount = P + SI = 5P, so SI = 4P. 4P = P * R * 20 / 100. 4 = R / 5. R = 20%.

AI explanation

Using the simple interest formula R = ((Amount - Principal) * 100) / (Principal * Time), we find the interest is 4 times the principal since the amount is 5 times its original value. R = (4 * 100) / 20 = 20. The rate of interest is 20%.

Keep practicing — related questions