A sum of money doubles itself in 10 years at simple interest. What is the annual rate of interest?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 10%
A sum doubles when the interest equals the principal, that is, the interest is 100% of the sum, earned evenly over the years at simple interest.
Interest in 10 years \(=100\%\) of the sum
\(\displaystyle \text{Rate}=\frac{100\%}{10}=10\%\) per annum
The annual rate of interest is 10%.