At what annual rate (rounded off to the nearest integer) of simple interest will a sum of money become five times its initial value in 18 years?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 22%.
Let the initial principal amount = P and final amount = 5P
SI = 5P - P = 4P
Simple Interest (SI) = (P × R × T)/100
⇒ 4P = (P × R × 18)/100
⇒ R = 400/18 = 22.22... ≈ 22
Therefore, the annual rate of simple interest is 22%.