A man took a loan of ₹32,400 at a certain rate of simple interest per annum. The rate of interest is one-fourth of the number of years for which the loan is taken. If he paid ₹11,664 as interest at the end of the loan period, the rate of interest was:
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. 3%.
We know that,
SI = (P × R × T)/100
here, S.I. = Simple Interest = Rs.11664,
R = rate = T/4, P = Principal, and T = Time
⇒ 11664 = (32400 × T × T/4)/100
⇒ 11664 = 324 × T2/4
⇒ T2 = 144
⇒ T = 12
⇒ R = T/4 = 12/4 = 3%