At what rate of simple interest a certain will be doubled in 10 years ?10%12%13%15% (2024)

FAQs

At what rate of simple interest a certain amount will be doubled in 10 years? ›

Hence the required rate in which the sum becomes double itself in 10 years is 10%.

Question 1. The answer to the first question is: the time it takes for money to double at a simple interest of 10% per year is closest to b. 7 years. The Rule of 70 provides an approximation to the amount of time ti takes for a sum to double in value at "i interest.

Here, we have the principal amount as Rs 10000, and we want to know the rate of interest at which it will double in 15 years. Therefore, the rate of annual simple interest required for Rs 10000 to double in 15 years is 13.33%. Out of these, the correct answer is option c) 6.75%.

A 10% interest rate will double your investment in about 7 years (72 ∕ 10 = 7.2); an amount invested at a 12% interest rate will double in about 6 years (72 ∕ 12 = 6). Using the Rule of 72, you can easily determine how long it will take to double your money.

The formula for the rule of 72

This being a formula, it works in the opposite direction, too: You can figure the compound rate of return required to double your money in a certain time frame. For instance, to double your money in 10 years, the compound rate of return would have to be 7.2%.

∴ At 8% per annum with simple interest, a sum of money double in 12.5 years.

For example, the Rule of 72 states that $1 invested at an annual fixed interest rate of 10% would take 7.2 years ((72 ÷ 10) = 7.2) to grow to $2. In reality, a 10% investment will take 7.3 years to double (1.10^7.3 = 2).

Rate = 100/10 = 10%. ∴ The rate of interest is 10%.

For simple interest, you'd simply divide 1 by the interest rate expressed as a decimal. If you had $100 with a 10 percent simple interest rate with no compounding, you'd divide 1 by 0.1, yielding a doubling rate of 10 years.

Understand the Problem:

100,000 to double at a simple interest rate of 8%. So, the detailed solution shows that it will take 12.5 years for your principal of \$100,000 to double at an 8% simple interest rate. Personal 1-on-1 Live Tutoring with our dedicated Certified Experts.

How long will it take $1000 to double at 6% simple interest? ›

So, if the interest rate is 6%, you would divide 72 by 6 to get 12. This means that the investment will take about 12 years to double with a 6% fixed annual interest rate. This calculator flips the 72 rule and shows what interest rate you would need to double your investment in a set number of years.

Rule of 72

Simply divide the number 72 by the annual rate of return to determine how many years it will take to double. For example, $100 with a fixed rate of return of 8% will take approximately nine (72 / 8) years to grow to $200.

It would take 14.4 years to double your money. Applying the rule of 72, the number of years to double your money is 72 divided by the annual interest rate in percentage. In this question, the annual percentage rate is 5%, thus the number of years to double your money is: 72 / 5 = 14.4.

For example, if an investment scheme promises an 8% annual compounded rate of return, it will take approximately nine years (72 / 8 = 9) to double the invested money.

It takes 9.9 years for money to double if invested at 7% continuous interest.

∴ The rate of interest per annum is 20%.

Hence, the rate of interest to double a money in 8 years will be 12.5% per annum.

Thumb rule is that money doubles in 72/x years where x is the approx. interest rate compounding annually. In your question 72/x is 4 years so x would be 18% approx. Say if you have to compute interest rate if money double in 6 years then answer will be 72/6 = 12 % approx.

So time required is 10 years. Was this answer helpful?