WBCS.LIVE practice question

At what exact rate percent per annum will a given sum of money mathematically double itself in 8 years under Simple Interest?

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: Let the principal amount be 'P'. For the sum to double itself, the Simple Interest earned over 8 years must also equal 'P' (so Principal + Interest = 2P). The formula for the Rate is (100 Ɨ Simple Interest) Ć· (Principal Ɨ Time). Substituting the values gives (100 Ɨ P) Ć· (P Ɨ 8). The P cancels out, leaving 100 Ć· 8, which perfectly equals 12.5%.