Reshma took a loan of ₹12,00,000 with simple interest for as many years as the rate of interest. If she paid ₹9,72,000 as interest at the end of the loan period, what was the rate of interest per annum?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. 9%.
Given that
Reshma took a loan of ₹12,00,000
If she paid ₹9,72,000 as interest at the end of the loan period,
Formula used
Simple interest = PRT/100
Amount = P + Simple interest
Where, P = Sum invested, R = rate of interest, T = Time taken
Calculation
⇒ 972000 = 1200000 × R × R/100
⇒ R2 = 81
⇒ R = 9%