Question 68

If a sum of money amounts to 6 times of itself in 25 years at simple interest, then what is the rate of interest per annum?

Solution

Let's assume theĀ principal amountĀ is 'y'.

If a sum of money amounts to 6 times of itself in 25 years at simple interest.

principal amountĀ + interestĀ amount in 25 years = 6y

y +Ā interest amountĀ in 25 years = 6y

interest amountĀ in 25 years = 6y-y = 5y

$$simple\ interest=\frac{principal\times\ rate\times\ time}{100}$$

$$5y=\frac{y\times\ rate\times25}{100}$$

$$1=\frac{rate\times5}{100}$$

rate of interest per annum = 20%


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