A person took a loan of ₹1,200 on simple interest for as many years as the rate of interest. If he paid ₹432 as interest at the end of the loan period, what was the rate of interest per annum?

Correct option is D

Given:

Principle = ₹1200

Interest = ₹432

Rate of interest = Time for which money was borrowed

Formula Used:

​$$SI = \frac{P \times r \times t }{100}$$​​

Solution:

Let the rate of interest be x

Then time = x

​$$432 = \frac{1200 \times x \times x }{100}$$​​

​$$x^2 = 36$$​​

x = 6

Hence rate of interest = 6% p.a.