Question

X took a loan of Rs. 12500 with simple interest for as many years as the rate of interest. If the interest paid at the end of the period was Rs. 18000, then what was the rate of interest?

• A. 16 %
• B. 11 %
• C. 14 %
• D. 12 %

Answer 1

Answer:

D. 12 %

Solution:

Given 

X took a loan = Rs 12500 

Formula used 

Simple Interest = $\frac{principal\times{Rate}\times{time}}{100}$

Calculation 

Rate of interest = Time = x 

⇒ $18000 = 12500\times{\frac{x^2}{100}}$

⇒ x² = 144

x = 12%

∴ The rate of Interest is 12 percent