WBCS.LIVE practice question

A sum of money doubles itself in 8 years at simple interest. What is the rate of interest per annum?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. 10%
  2. 12%
  3. 12.5%
  4. 15%

Correct answer and explanation

Correct answer: 12.5%

Explanation: āœ… Correct Answer: (C) 12.5% šŸ“š Explanation: Step-1: Let the Principal (P) be Rs. 100. Since the money doubles, the Amount (A) becomes Rs. 200. Therefore, the Simple Interest (SI) is 200 - 100 = Rs. 100. Step-2: Use the formula SI = (P x R x T) Ć· 100. Here, 100 = (100 x R x 8) Ć· 100. Step-3: This simplifies to 100 = 8R. So, R = 100 Ć· 8 = 12.5%. The rate is 12.5% per annum.