Question : An amount becomes double in 8 years on simple interest. In how many years would Rs. 25,000 become Rs. 1,00,000 with the same rate of interest?
Option 1: 32
Option 2: 28
Option 3: 16
Option 4: 24
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Correct Answer: 24
Solution :
Let the principal sum be P and the rate be R.
Simple Interest, SI = P
Time, n = 8 years
Simple Interest =$\frac{\text{Principal×Rate×Time}}{100}$
⇒ P = $\frac{P×R×8}{100}$
⇒ R = $\frac{100}{8}$ = 12.5%
⇒ P = Rs. 25,000
Total amount = P + Simple interest
100000 = 25000 + Simple interest
$\therefore$ Simple interest = 75000
Simple interest =$\frac{\text{Principal×Rate×Time}}{100}$
⇒ 75000 = $\frac{25000×12.5×n}{100}$
⇒ $n = 3 × 8 = 24$ years
Hence, the correct answer is 24.
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