At which rate of simple interest does an amount become double in 12 years?
Answer & explanation
Correct answer: option 3
Let initial sum = P & Required amount = 2P
Amount = Principal + Simple Interest
2P = P + Simple Interest
Simple Interest = 2P - P = P
We know ,
Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)
P = \(\frac{P ×Rate × 12 }{100}\)
Rate = 8\(\frac{1}{3}\)%