If a certain sum of money at simple rate of interest doubles itself in 5(1/2)…
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If a certain sum of money at simple rate of interest doubles itself in 5(1/2) years then what is the rate ?
- A.
16.66 %
- B.
18.18 %
- C.
15.33 %
- D.
14.8 %
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Correct answer: B
Key insight: for simple interest, doubling means the interest earned equals the principal.
Let P be the principal, r be the annual rate (in %), and t = 5.5 years.
Simple interest earned = P * r * t / 100.
Since the amount doubles, interest = P. So P * r * 5.5 / 100 = P.
Cancel P from both sides to get r * 5.5 / 100 = 1, therefore r = 100 / 5.5 = 200/11 ≈ 18.18%.
Answer: 200/11 % ≈ 18.18%.