Question

Find the rate of interest, If the principal amount becomes 5 times in 8 years and the rate is calculated at simple interest.
1. 62.5%
2. 12.5%
3. 75%
4. 50%

Answer 1

Correct Answer - Option 4 : 50%

Given:

Amount = 5P

Time = 8 years

Formula used:

A = P + S.I.

S.I. = PRT/100

Where, P = Principal, S.I. = Simple interest

A = Amount, R = Rate of interest, T = Time

Calculation:

A = P + S.I.

⇒ 5P = P + S.I.

⇒ S.I. = 4P      ---(1)

As we know that, S.I. = PRT/100

From equation (1), we can write 

⇒ 4P = (P × R × 8)/100

⇒ R = 50%

∴ The rate percent is 50%.