A certain sum becomes 7 times of itself in 10 years at a rate of simple interest. In 20 years it will become how many times of itself at the same rate of simple interest?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is Option 4 i.e. 13.
P is the principal amount (the initial sum),
R is the rate of interest,
T is the time period in years.
The problem states that the sum becomes 7 times of itself in 10 years. This means:
⇒ P + Simple Interest for 10 years = 7P
⇒ SI10 = P × R/100 × 10
⇒ 6P = P × R/100 × 10
⇒ 6 = R/100 × 10
⇒ 6 = R/10
⇒ R = 60%
SI20 = P × 60/100 × 20 = 12P
The total amount after 20 years will be:
⇒ A20 = P + SI20 = P + 12P = 13P
Hence
After 20 years, the sum will become 13 times of itself at the same rate of simple interest.