Simple Interest — A sum becomes double in 10 years. Find the annual rate of simple interest.
Aptitude
Simple Interest
Difficulty: Easy
Choose an option
Answer
Correct Answer: 10%
Explanation
Introduction / Context:Doubling under simple interest implies the interest earned equals the principal over the given time.
Given Data / Assumptions:
- A = 2P in t = 10 years.
- Simple interest applies.
Concept / Approach:If A = 2P then SI = P. With SI = P * r * t, solve for r.
Step-by-Step Solution:P = P * r * 10 ⇒ r = 1 / 10 = 0.10 = 10%.
Verification / Alternative check:At 10% for 10 years, SI = P; amount = 2P.
Why Other Options Are Wrong:1% and 5% are too small; 20% is too large.
Common Pitfalls:Applying compound interest ideas; stay with SI linearity.
Final Answer:10%