Question

At what rate of interest would a sum of money becomes one and half in 10 year ?

Answer 1

Shortcut trick

Let the Principle be 100.

P = 100, then A = 200 and SI will be 200 - 100 = 100

YES = 100 in 10 years

Rate = 100/10 = 10%.

∴ The interest rate is 10%.

The traditional method is:

Given:

Time period = 10 years

Formula used:

SI = (P × R × T)/100

A = P + SI

Where P = main amount, R = rate, T = time, SI = primary interest

Calculations:

Monetary amount 2P

YES = 2P - P

⇒ P = (P × R × 10)/100

⇒ 1 = R/10

⇒ R = 10%

∴ The interest rate is 10%