If a certain sum of money becomes double of itself in 5 years 6 months at simple interest, then what will be the annual rate of interest (approximate)?
Show answer & explanation
Correct answer: C
Explanation
Given:
Time = 5 years 6 months = 5.5 years
The amount doubles.
By the formula:
SI = (P × R × T) / 100
A = P + SI
Amount doubles ⇒ SI = P
P = (P × R × 5.5) / 100
I = (R × 5.5) / 100
R × 5.5 = 100
R = 100 ÷ 5.5
R = 18.18%