Correct Answer - Option 2 : 5 years 4 months
Given:
Amount = 2 × Principal
Rate = 18.75% per annum
Formula used:
(i) SI = PRT/100
(ii) A = SI + P
Where, A = Amount
SI = simple interest
P = principal
R = rate
T = time
Calculations:
SI = (P × R × T)/100
⇒ SI = (P × 18.75 × T)/100
⇒ SI = 3PT/16
A = SI + P
⇒ 2P = (3PT/16) + P
⇒ 2 = (3T/16) + 1
⇒ 1 = 3T/16
⇒ T = 16/3 years
⇒ T = 5 years 4 months
∴ In 5 years 4 months the amount will be doubled at a rate of 18.75% simple interest per year.
