Final answer:
To calculate the rate of interest when the simple interest on a principal is half of the amount in 5 years, use the formula Interest = Principal × rate × time. In this case, the rate of interest is found to be 10%.
Step-by-step explanation:
To find the rate of interest when the simple interest on a principal is half of the amount in 5 years, we use the simple interest formula:
Interest = Principal × rate × time
Here, the interest accrued over 5 years is half the principal, so if we let P represent the principal, the interest (I) will be ½P. The time (T) is given as 5 years. From the formula, we have:
Interest = ½P = P × rate × 5
Dividing both sides by P gives us ½ = rate × 5. To find the rate, we divide ½ by 5:
rate = ½ ÷ 5 = 1/10
The rate is thus 1/10, which is equivalent to 10%. Therefore, the rate of interest is 10%.