In a certain time, a sum of money becomes five itself if the rate of the interest is 16% p.a. Then the certain time (in years) is:
Answer & explanation
Correct answer: option 3
A sum of money becomes five itself if the rate of the interest is 16% p.a
Let initial sum of money = P . So , Amount = 5P
Now ,
Amount = Principal + Simple Interest
5P = P + Simple Interest
Simple Interest = 5P - P = 4P
We know ,
Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)
4P = \(\frac{P × 16 × Time }{100}\)
4 = \(\frac{ 16 × Time }{100}\)
Time = 25 years