At what rate of interest (in percentage) per year will a sum of money double itself in 4 years on simple interest?

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RRB NTPC Graduate Level CBT-I Official Paper (Held On: 06 Jun, 2025 Shift 3)
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  1. 23%
  2. 50%
  3. 25%
  4. 27%

Answer (Detailed Solution Below)

Option 3 : 25%
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Detailed Solution

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Given:

Time (t) = 4 years

Final Amount = 2 × Principal (P)

Formula used:

Simple Interest (SI) = (P × r × t)/100

Where, SI = Final Amount - Principal (P)

Calculation:

Final Amount = 2 × Principal (P)

⇒ SI = Principal (P)

⇒ Principal (P) × r × t/100 = Principal (P)

⇒ r × t = 100

⇒ r × 4 = 100

⇒ r = 100/4

⇒ r = 25%

∴ The correct answer is option (3).

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