A sum becomes 2.5 times in 10 years under simple interest. Find the rate.
- (a)10%
- (b)12.5%
- (c)15%
- (d)20%
Answer
Why
Correct — C. Turn 'becomes 2.5 times' into the interest earned, then solve for the rate.
Rule: simple interest = P × R × T ÷ 100.
Amount = 2.5P, so interest = 2.5P − P = 1.5P
1.5P = P × R × 10 ÷ 100
R = 1.5 × 100 ÷ 10 = 15
The rate is 15% per annum: option (c).
Why the others are wrong
- (a)10% — 10% for 10 years adds 100% of the sum, so the sum only doubles. The stem needs it to reach 2.5 times.
- (b)12.5% — 12.5% for 10 years adds 125%, making the amount 2.25 times the sum. The stem needs 150% interest, not 125%.
- (d)20% — 20% for 10 years adds 200%, so the sum becomes 3 times itself. That overshoots the 2.5 the stem gives.
Concept
'Becomes n times' describes the amount, not the interest. Subtract the principal first: an amount of 2.5P holds 1.5P of interest.
Simple interest adds the same P × R ÷ 100 every year. So 1.5P over 10 years is 0.15P a year, which is 15% of P.
The stem says 'Find the rate' without 'per annum'. 15% is the yearly rate, and the key takes that reading.
Key facts
- Simple interest = P × R × T ÷ 100.
- Amount = principal + interest, so 'becomes 2.5 times' means interest of 1.5 times the principal.
- Shortcut: R = (n − 1) × 100 ÷ T when a sum becomes n times in T years.
Study next
Common traps
- Using 2.5 as the interest multiple: 2.5 × 100 ÷ 10 = 25%, a rate no option offers.
- Forgetting that 10% for 10 years only doubles a sum.
The same frame is set in Quant at 19 Sep 2025, 16:00, Quant Q.7: 2.5 times in 5 years means 30% a year, so becoming 5 times takes 13 1⁄3 years.
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