Question

Find the simple interest rate applied to a principal over $10$ years if the total interest paid equals the borrowed principal.

• A. $10\%$
• B. $14\%$
• C. $12\%$
• D. $20\%$

Answer 1

Answer: (A)

$10\%$

We have given simple interest and the borrowed principal is equal.

So, let $x$ be the simple interest and borrowed principal.

$\Rightarrow$ $S.I.=\frac{P\times R\times T}{100}$

$\Rightarrow$ $x=\frac{x\times R\times 10}{100}$

Therefore, $R=\frac{100}{10}=10\%$.