In how many years will a sum of money become double of itself at 12% per annum on simple interest?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → \(8\frac{1}{3}\)
A sum doubles when the interest equals the principal. Simple interest is \(\frac{P\times R\times T}{100}\), so with interest \(=P\):
\(\displaystyle P=\frac{P\times12\times T}{100}\)
\(12T=100\)
\(\displaystyle T=\frac{100}{12}=8\frac{1}{3}\) years
Tip: At simple interest, a sum doubles in \(\frac{100}{R}\) years and becomes \(n\) times in \(\frac{100(n-1)}{R}\) years.