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Question : At what annual rate (rounded off to the nearest integer) of simple interest will a sum of money become five times its initial value in 18 years?

Option 1: 18%

Option 2: 20%

Option 3: 22%

Option 4: 24%


Team Careers360 25th Jan, 2024
Answer (1)
Team Careers360 27th Jan, 2024

Correct Answer: 22%


Solution : Given. Time = 18 years
Let the principal be $x$.
The sum of money after 18 years = $5x$
Simple interest = $5x-x=4x$
Simple interest = $\frac{\text{Principal × Rate × Time}}{100}$
$⇒4x=\frac{x× \text{Rate}×18}{100}$
$\therefore$ Rate = $\frac{400}{18}=22.22\approx 22$%
Hence, the correct answer is 22%.

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