An amount becomes 3 times of itself in 20 years. What is the rate of simple interest per annum?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 10%
The amount is principal + interest, so when the amount becomes 3 times the principal, the interest earned is twice the principal. Then \(R=\frac{100\times\text{SI}}{P\times T}\).
Assuming the principal to be 100:
Amount \(=300\), so SI \(=300-100=200\) in 20 years
\(\displaystyle R=\frac{100\times200}{100\times20}=10\%\) per annum