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Nabeela took a loan of Rs. 1200 with simple interest for as many years as the rate of interest. If she paid Rs. 432 as interest at the end of the loan period, what was the rate of interest ?

Correct answer: B. 6

  • A. 3.6
  • B. 6
  • C. 18
  • D. Cannot be determined

Explanation

If the numerical rate is r%, the time is r years, so Rs. 432 = Rs. 1200 x (r/100) x r. This gives r² = 36, hence r = 6 and the time is 6 years, so the rate is 6% per annum. Option c, 18%, ignores the condition that the time and numerical rate are equal.

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