Question

At what rate per cent of simple interest will a sum of money double itself in $12$ years?

• A. $7\frac{1}{2}\%$
• B. $8\frac{1}{3}\%$
• C. $10\%$
• D. $12\%$
  

Answer 1

The correct option is B $8\frac{1}{3}\%$

In case of Simple interest, total amount $A$ is,

$A=P(1+\frac{rt}{100})$

where

$P=$Principal

$r=$interest rate

$t=$time (in years)=$12$ (given)

After $12$ years, Sum of money doubles itself,

that is $A=2P$

Now apply the formula,

$A=P(1+\frac{rt}{100})$

$2P=P(1+\frac{12r}{100})$

$2=1+\frac{12r}{100}$

$1=\frac{12r}{100}$

Therefore,

$r=\frac{100}{12}=8\frac{1}{3}$percent