At what rate percent of simple interest will a sum of money double itself in 12 years?
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Answer:
case of Simple interest, total amount A is,
A=P(1+
100
rt
)
where
P=Principal
r=interest rate
t=time (in years)=12 (given)
After 12 years, Sum of money doubles itself,
that is A=2P
Now apply the formula,
A=P(1+
100
rt
)
2P=P(1+
100
12r
)
2=1+
100
12r
1=
100
12r
Therefore,
r=
12
100
=8
3
1
percent
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