Asked by suneetha

A sum of money becomes 8/5 of itself in 5 years at certain rate of simple interest. Find the rate of interest.
Answered by Steve
(1+5r) = 1.6
5r = .6
r = .12 or 12%
Answered by Jay
how did you derive the formula? please can you explain? I really need to understand this.
Answered by Ramnivas
Let the principal money be 1. Then compond money = 1 *8/5 = 8/5
Now
Interst = compound - principal = 8/5 - 1 = 3/5
Now formula for interst
Interest = principal*rate*time/100

= 3/5=1*rate*5/100

Rate= 12%
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