In how many years will a sum of money double itself at 18.75 % p.a simple interest?
Answer & explanation
Correct answer: option 3
A sum of money will double itself means, P = 100 and Amount = 200 that means Interest = 100
Simple interest = \(\frac{\text{P x R x T} }{ 100}\)
100 = \(\frac{\text{100 x 18.75 x T} }{ 100}\)
10000 = T x 1875
T = \(\frac{ 10000}{1875 }\)
T = \(\frac{ 16}{3 }\)
T = 5 \(\frac{ 1}{3 }\)
Thus, 5 years 4 months is correct answer.