Question

At 20% per year simple interest, how many years will it take SR 50,000 to accumulate to SR 86,400 is closest to:

(A) 3.5 years

(B) 4 years

(C) 4.5 years

(D) 3 years

Answer 1

Answer – In the given problem, the principal (P) = SR 50,000 and rate of interest (r) = 20%.

Let the no. of year it will take the principal to accumulate SR 86,400 be t years.

Therefore, according to the formula of simple interest,

Prt/100 + P = Amount;

Or, (50,000 * 20 * t)/100 + 50,000 = 86,400;

Or, 1,000,000t/100 = 36,400;

Or, 10,000t = 36,400;

Or, t = 3.64.

Therefore, it will take closest to 4 years for SR 50,000 to accumulate to SR 86,400 at 20% per year simple interest.

So, Option B is the correct answer.