If a sum triples in 4 years at simple interest, find the time that it would take to become 5 times itself at the same rate of interest.
Answer & explanation
Correct answer: option 3
Sum triple in 4 years .
Let sum = P , then Amount = 3P
Simple interest of 4 years= 3P - P = 2P
Simple interest of 1 year = \(\frac{2P }{4}\) = 0.5P
We know ,
Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)
0.5P = \(\frac{P × Rate × 1 }{100}\)
Rate = 50%
ATQ ,
Amount = 5P
Simple interest = 5P - P = 4P
4P = \(\frac{P × 50 × Time }{100}\)
Time = 8 years