If a sum of money amounts to 6 times of itself in 25 years at simple interest, then what is the rate of interest per annum?
Answer & explanation
Correct answer: option 1
A sum of money amounts to 6 times of itself in 25 years at simple interest.
Let sum of money = P . So , Amount = 6P
Amount = Principal + Interest
6P = P + Interest
Interest = 6P - P = 5P
Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)
5P = \(\frac{P ×Rate × 25 }{100}\)
Rate = 20%