Question

Money was lent on simple interest. After 12 years, its simple interest becomes $\frac{3}{5}$ of the money. Find the rate of interest.

• A. 4% p.a
• B. 2% p.a.
• C. 5% p.a.
• D. 3% p.a.

Answer 1

Answer:

C. 5% p.a.

Solution: Given: Time (T) = 12 years Simple interest (SI) = (3/5) × Principal (P) Formula used: Simple interest (S.I) = (P × R × T)/100 Where, R = rate Calculation: Simple interest (S.I) = (P × R × T)/100 ⇒ (3/5) × P = (P × R × 12)/100 ⇒ (3/5) = (R × 12)/100 ⇒ R = (3 × 100)/(12 × 5) ⇒ R = (100/20) = 5% ∴ The correct answer is 5%.