Question : Money was lent on simple interest. After 12 years, its simple interest becomes $\frac{3}{5}$ of the money. Find the rate of interest.
Option 1: 4% p.a.
Option 2: 2% p.a.
Option 3: 5% p.a.
Option 4: 3% p.a.
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Correct Answer: 5% p.a.
Solution : Given: After 12 years, its simple interest becomes $\frac{3}{5}$ of the money. Let the rate of interest be $r$ Let the principal be $x$. So, simple interest = $\frac{3x}{5}$ Simple interest=$\frac{\text{Principal × Rate × Time}}{100}$ ⇒ $\frac{3x}{5}=\frac{x×r×12}{100}$ ⇒ $12r=60$ $\therefore r =5$% So, the rate of interest is 5%. Hence, the correct answer is '5% p.a.'.
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