Simple interest on a sum for 5 years is equal to 25 percent of the principal. In how many years interest will be equal to the principal?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is Option 3 i.e. 20 years.
S.I. for 5 years = 25% of principal
⇒ S.I. = 25% × P
Now,
⇒ S.I. = (P × R × T)/100
here, S.I. = Simple Interest, P = principal, R = Rate, T = time
⇒ 25% × P = (P × R × 5)/100
⇒ 0.25 = R/20
⇒ R = 0.25 × 20
⇒ R = 5%
Now, let n be the years when P will be equal to S.I.
⇒ S.I. = (P × R × n)/100
⇒ P = (P × 5 × n)/100
⇒ 1 = 5n/100
⇒ 1 = n/20
⇒ n = 20 years