Aman invests Rs.5,000 for three years at a certain rate of interest, compounded annually. At the end of the first year, it amounts to Rs.5,600. Calculate the rate of interest per annum.

Correct option is C

Given:    

Principal (P): Rs.5,000
Amount at the end of the 1st year (A1): Rs.5,600
Interest earned in the first year = Rs.5,600 - Rs.5,000 = Rs.600
Formula Used:
Simple interest formula: $$SI = \frac{P\times R \times T}{100}$$   ​

Solution:
I = Interest earned = Rs.600
P = Principal amount (initial investment) = Rs.5,000
r = Annual interest rate (in decimal form)
t = Time period in years = 1   

​$$SI = \frac{P\times R \times T}{100}$$ 

600 = $$\frac{5000\times R \times 1}{100}$$ 

R = 12%