If a certain sum of money becomes thrice of itself in 8 years and 6 months at simple interest. Then what will the annual rate of interest be?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 23.52 percent.
the principal = P
The amount = A
The sum becomes thrice of itself:
So
A = 3P
The time is 8 years 6 months, or T = 8.5 years
A = P × (1 + (R × T)/100)
⇒ 3P = P × (1 + (R × 8.5)/100)
⇒ 3P/P = 1 + (R × 8.5)/100
⇒ 3 = 1 + (R × 8.5)/100
⇒ 2 = (R × 8.5)/100
⇒ 200 = R × 8.5
⇒ 200/8.5 = R
⇒ R = 23.52%