Correct Answer - Option 3 : 8 years

**Given:**

The principal doubles itself at 12.5% rate of interest.

**Formula used:**

Simple Interest(S.I) = Principal(P) × Rate(R%) × Time(T)/100

Amount(A) = P + S.I

**Calculation:**

According to the question,

Principal double means amount is 2P

⇒ Amount(A) = P + S.I

⇒ A = P + P

⇒ A = 2P

It means Principal = P and S.I = P

Then, T = (S.I × 100)/(P × R)

⇒ (P × 100)/(P × 12.5)

⇒ 1000/125

⇒ T = 8 years

**∴ The principal doubles itself at 12.5% rate of interest in 8 years.**