Question

The simple interest earned on a certain amount is double the amount when invested for 10 years. What is the interest rate being offered?

Answer 1

Answer: 10%

Explanation:

The formula to calculate the simple interest (I) is given by :-

$I=Prt---------(1)$                      

Final amount : $A=P+I---------(2)$    

Given : The simple interest earned on a certain amount is double the amount when invested for 10 years.

i.e A = 2P

Put this in equation (2), we get

$2P=P+I\\\\\Rightarrow\ I=P$    

Put the value of I in (1), we get

$P=Prt\\\\\Rightarrow\ rt=1$          

Since t=10 years {given} , then

$r(10)=1\\\\\Rightarrow\ r=\dfrac{1}{10}=0.1$

In percent , $r=0.1\times10=10\%$

Hence, the interest rate is being offered = 10%