Question

A sum of money becomes 5/4 of itself in 5 years at a certain rate of simple interest. Find the rate of interest?

Answer 1

Let :

Initial sum of money ( principal) = x

Given :

Amount (A) = (5/4) of initial sum of money

Time (t) = 5 years

To find :

Rate of simple interest

Formula used :

A = P + I

I = Prt

Solution :

Amount = (5/4)of principal

A = (5/4) x

Now , Interest (I) = Amount - Principal

I = (5/4)x - x

I = (1/4)x

Put all value in, I = Prt

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Answer 2