Question : At what rate of simple interest per annum will a sum of money triple itself in 16 years?
Option 1: 11.5%
Option 2: 11%
Option 3: 12%
Option 4: 12.5%
Correct Answer: 12.5%
Solution :
Let the rate of interest per annum be $r$.
Let $P$ be the principal amount invested.
Time of investment, $t$ = 16 years
If P amount of money triples itself in 16 years, then interest gained $= 3P - P = 2P$
Simple Interest = $\frac{P\times r\times t}{100}$
$⇒2P = \frac{P\times r\times 16}{100}$
$\therefore r = 12.5\%$
Hence, the correct answer is 12.5%.
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