A sum becomes four times itself in $20$ years at simple interest. The annual rate is:

Question

A sum becomes four times itself in $20$ years at simple interest. The annual rate is:

Option A

10%

Option B

12%

Option C — Correct answer

15%

Correct choice.

Option D

20%

Explanation

If the amount becomes $4P$, then the simple interest earned is $3P$. Using $\frac{PRT}{100}=3P$ gives $\frac{R\times20}{100}=3$, so $R=15\%$.

Chapter Mock 5: Simple Interest and Compound Interest