5. A Bank promises to double the principal invested by their customers in 10 years. What
is the rate of simple interest offered by the bank?
a) 8%
b) 10%
c) 12%
d) 7%
Answers
SOLUTION
TO CHOOSE THE CORRECT OPTION
A Bank promises to double the principal invested by their customers in 10 years. The rate of simple interest offered by the bank
a) 8%
b) 10%
c) 12%
d) 7%
EVALUATION
Let Principal of money borrowed = P
R = Rate of interest per annum
T = Time period for which money is borrowed = 10 years
I = Simple Interest = 2P - P = P
So by the law of calculating simple interest we have
Hence the required rate of interest = 10%
FINAL ANSWER
Hence the correct option is b) 10%
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Given : bank promise to double the principal invested by their customers in 10 years
To Find : rate of simple interest offered by the bank
Solution:
Amount deposited = P
Amount after 10 years A = 2P
Simple interest = A - P = 2P - P = P
R = ?
T = 10
SI = P * R * T /100
=> P = P * R * 10 /100
=> 1 = R/10
=> R = 10
rate of simple interest offered by the bank is 10 %
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