At what annual rate of interest will a sum of money be thrice in 5 years at simple interest?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 40%.
Let the principal (initial sum) = P
At simple interest, the total amount becomes thrice the principal, i.e., the amount A = 3P
The time period is T = 5 years
⇒ A = P + SI
⇒ SI = (P × R × T)/100
⇒ A = P + (P × R × T)/100
⇒ 3P = P + (P × R × 5)/100
⇒ 3P - P = (P × R × 5)/100
⇒ 200 = R × 5
⇒ 200/5 = 40% = R