A sum of money amounts to 5 times of itself in 20 years, when invested at a certain rate of simple interest per annum. What is the rate of simple interest per annum that is on offer?
Answer & explanation
Correct answer: option 3
A sum of money amounts to 5 times of itself in 20 years.
Let initial sum = P
Amount after 20 years = 5P
Simple interest = 5P - P = 4P
Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)
4P = \(\frac{P × Rate × 20 }{100}\)
Rate = 20%