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The simple interest on a sum of money is ₦450 at a rate of 5% per annum. How long will it take for the principal to double?
  • a)
    20 years
  • b)
    15 years
  • c)
    6 years
  • d)
    10 years
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
The simple interest on a sum of money is 450 at a rate of 5% per annum...
The formula for simple interest is:
SI = (P × R × T) / 100
Where:
  • SI = Simple Interest
  • P = Principal
  • R = Rate of interest per annum
  • T = Time in years
Step 1: When the principal doubles
If the principal doubles, then SI = P. Substituting into the formula:
P = (P × R × T) / 100
Canceling out P:
1 = (R × T) / 100
Solve for T:
T = 100 / R
Step 2: Substitute the given rate
The rate of interest, R = 5%:
T = 100 / 5 = 20 years
Final Answer:
The principal will double in 20 years
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