Question

Find the simple interest rate applied to a principal over $5$ years if the total interest paid equals the borrowed principal.

• A. $10\%$
• B. $20\%$
• C. $30\%$
• D. $40\%$

Answer 1

The correct option is B $20\%$

We have given that interest and borrowed principal are same.

Let $x$ be the interest and borrowed principal.

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

$\Rightarrow$ $x=\frac{x\times R\times 5}{100}$

$\therefore$ $R=\frac{100}{5}=20\%$