Question

6 An amount is borrowed at simple interest for 25 years. At the end of this period, this amount, along with its interest, has trebled itself. What was the rate per cent?

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Answer 1

This is a mathematical problem that can be solved using algebra. Let P be the original amount borrowed, and R be the interest rate as a decimal (for example, 5% would be represented as 0.05).

We know that at the end of 25 years, the amount borrowed has trebled, so the total amount is 3P. We also know that the interest is calculated using simple interest, which is calculated as P x R x T, where T is the number of years.

So we can set up the equation:

3P = P + P x R x 25

To find R, we can solve for R by dividing both sides of the equation by P:

3 = 1 + 25R

Then by subtracting one from both sides we have :

2 = 25R

Then by dividing both sides by 25 we can find the rate as :

R = 2/25

Finally, to find the interest rate as a percentage, we multiply R by 100:

rate = 2/25 x 100 = 8%

So the interest rate is 8% per annum