Question

Find the simple interest rate applied to a principal over $8$ years if the total interest paid equals the borrowed principal.

• A. $10\%$
• B. $20\%$
• C. $12.5\%$
• D. $15\%$

Answer 1

Answer: (C)

$12.5\%$

We have given that interest and principal are equal.

Let Rs. $x$ be the interest and principal.

Here $T=8$ years

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

$\Rightarrow$ $x=\frac{x\times R\times 8}{100}$

$\Rightarrow$ $R=\frac{100}{8}=12.5\%$

Simple interest rate is $12.5\%$.