Reena borrowed Rs. 1200 at simple interest for a number of years equal to the rate of interest. At the end of the loan term, she paid Rs. 432 in interest. What was the interest rate?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. 6%.
SI = (P × R × T)/100
(1200 × R × R)/100 = 432
⇒ 12R2 = 432
⇒ R2 = 432/12 = 36
⇒ R = 6% per annum