Question

If an investment of Rs. X is done on simple interest, and the amount doubles in years, what would be the rate of simple interest per annum?

• A. \( \text{10} \)
• B. \( \text{12.5} \)
• C. \( \text{20} \)
• D. \( \text{25} \)

Hint:

Simple interest grows linearly over time, making it easy to compute in financial calculations.

Answer 1

The Correct Option is C

Using the simple interest formula: \[ SI = \frac{P \times R \times T}{100} \] Since the amount doubles, \( A = P + SI = 2P \), so: \[ P + P \times \frac{R \times T}{100} = 2P \] \[ P \times \frac{R \times T}{100} = P \] \[ R \times T = 100 \] For \( T = 5 \) years: \[ R = \frac{100}{5} = 20% \] Thus, the correct answer is 20% per annum.