A sum of money becomes thrice of itself in 20 years means if the principal is P, the final amount after 20 years is 3P.
The interest earned is:
Simple Interest = Final Amount - Principal
Simple Interest = 3P−P=2P
The simple interest formula is:
SI=100P×R×T
Where SI is Simple Interest, P is Principal, R is Rate per annum, and T is Time in years.
Given:
- SI=2P
- T=20 years
- P=P
Substituting into the formula:
2P=100P×R×20
2=100R×20
200=R×20
R=20200
R=10
Therefore, the simple interest rate per annum is 10%.