In how many years will a sum of money double itself at 12.5% p.a., at simple interest?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 8 years
For a sum to double at simple interest, the interest earned must equal the principal.
Using the formula:
$\text{SI} = \frac{P \times R \times T}{100}$
Set SI = P:
$\frac{P \times 12.5 \times T}{100} = P$
Cancel PPP:
$\frac{12.5 \times T}{100} = 1$
$T = \frac{100}{12.5} = 8T=12.5100=8$
Correct answer: 8 years