Question

How long will it take for a sum of money to grow from Rs. 1250 to Rs. 10,000, if it is invested at 12.5% p.a. simple interest?
1. 8 years
2. 64 years
3. 72 years
4. 56 years

Answer 1

Correct Answer - Option 4 : 56 years

Given

Principal = Rs.1250

Amount = Rs.10000

Rate = 12.5%

Concept used

Simple interest

Calculation

Interest = Amount - Principal

Interest = 10000 - 1250

Interest = Rs.8750

Let the time be n years.

Si = \(\frac{{P\ \times\ R\ \times\ T}}{{100}}\)

\(8750 = \frac{{1250\ \times\ 12.5\ \times\ n}}{{100}}\)

n = \(\frac{{700}}{{12.5}}\)

n = 56 years.