A sum amounts to Rs. 25000 at 5% p.a. simple interest in 5 years. What will be the simple interest on the same sum at double rate and same number of years?
Answer & explanation
Correct answer: option 1
Total rate for 5 year = 5 × 5 = 25%
⇒ P × 125% = 25000 (given)
⇒ P = \(\frac{25000}{125}\) = 20000
Now, SI at 10% p.a. for 5 year,
SI = \(\frac{20000 × 10 × 5 }{100}\) = 10,000