A sum of money becomes thrice of itself in 20 years. Find the simple interest rate per annum?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 10%
The sum becomes three times itself, so the interest earned is twice the principal. Simple interest is \(\text{SI}=\frac{P\times R\times T}{100}\).
Assuming the principal to be 100:
Amount after 20 years \(=300\)
Simple interest \(=300-100=200\)
\(\displaystyle R=\frac{\text{SI}\times100}{P\times T}=\frac{200\times100}{100\times20}=10\%\)