If a certain sum of money can become 5 times of its principal in 10 years, then
the rate of interest is

So, you are asking at what interest rate will a sum of money double in 10 years.

Question, simple interest or compounded?

Simple interest accumulated on a sum for 10 years will double in 10 years with an interest rate of 10%. Now, if you want it to accumulate five times principle, the interest rate will have to be: P(i)(10)=5P. Modifying the equation, we could get: (i)(10)=5. Alas, (.5)(10)=5. 50% is the rate for simple interest.

However, we started out with an amount, and your question asks at what rate will our original investment increase to five times the original amount. So, our equation must be modified: P(i)(10)= 5(P)-P. So, working the equation, i (10)=5(P)-P/P. 5xP-P= 4(P)/P. To restate, i(10)+P=5P. Also, i(10)=4P. Further, i =4P/10. I = .4, or 40%.

As proof, if a sum earns 4 each year for 10 years, the product is 40. If the investment earns 4 per year, at 40% interest, that investment must be 10. 40+10=50.

Compounding, we will have the following equation: P(1+i)^10=5P. P(i)^10=5.

Modified, 5=1(i)^10. \/5^10= 1.1746. Subtracting 1, results in 17.46% interest rate. (1.1746)^10=4.999. 4.999(1)=~5.