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Question : If a sum is invested at simple interest, then it becomes $\frac{3}{2}$ of itself in 4 years. What is the annual rate of interest?

Option 1: 6.5 percent

Option 2: 12.5 percent

Option 3: 17.5 percent

Option 4: 10 percent


Team Careers360 19th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: 12.5 percent


Solution : The sum becomes $\frac{3}{2}$​ times itself in 4 years
⇒ $P +\frac{P×R×T}{100} = \frac{3}{2}$$P$
⇒ $P​​​​​​+\frac{P×R×4}{100} = \frac{3}{2}$$P$
⇒ $1​​​​​​+\frac{R×4}{100} = \frac{3}{2}$
⇒ ​​​$\frac{R×4}{100} = \frac{1}{2}$
⇒ R = ​​​$\frac{1}{2} × \frac{100}{4}$
⇒ R = ​​​$\frac{25}{2}$ = 12.5%
Hence, the correct answer is​ 12.5 percent.

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