Correct Answer - Option 2 : 25%
Given:
Time = 16 years
A certain sum of money becomes 5 times of itself.
Concept used:
R = (S.I. × 100)/(P × T)
S.I. = A – P
Where,
R → Rate
S.I. → Simple interest
P → Principal
T → Time
Calculations:
Let Principal x and amount 5x
S.I. = A – P
⇒ 5x – x = 4x
R = (S.I. × 100)/(P × T)
R% = (4x × 100)/(x × 16) = 25%
∴ The rate of interest is 25%