ASVAB Practice Math Questions

Answer A: Simple Interest I = P x R x T . Sum doubles in 20 years. So interest I = P;
P=PxRxT R =1/T = (1/20 ) % = 5%

Key takeaway: Simple Interest is charged only on the original principal, not on the interest accrued. In compound interest, interest is given on interest also besides on the principle amount.