Money was lent on simple interest. After 12 years, its simple interest becomes 3/5 of the money. Find the rate of interest.
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 5% p.a.
Given that
After (T = 12 years), its simple interest becomes 3/5 of the money
S.I. = 3/5 P
Formula used
S.I = (P × R × T)/100
where, R is the rate of interest p.a.
Calculation
⇒ 3/5 P = (P × R × 12)/100
⇒ 60 = 12R
⇒ R = 60/12 = 5 % p.a.