Question

If a sum triples in 15 years at simple rate of interest then the rate of interest per annum will be

Answer 1

Always start with the difference between the starting and final amounts (the “Interest Amount”).

The Simple Interest formula is:—

Interest Amount = (Principal x Rate x Time) / 100

Difference between your Principal and the final amount (basic arithmetic):—

P = Principal = $100

Final amount = $100 x 3 = $300

Therefore I = Interest Amount = $300 - $100 = $200

You know Time (T) is 16 years and need to find the Interest Rate (R).

Apply the formula I = PRT/100 and solve for R

Rearrange formula to R = (I x 100) / PT

R = (200 x 100) / (100 x 16)

R = 12.5% is your annual interest rate desired