Multiple choice

If the simple interest on Re. 1 for 1 month is 1 paisa, then the rate of interest per annum will be

  1. 10%

  2. 8%

  3. 12%

  4. 6%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Interest on Re 1 for 1 month is 1 paisa (0.01). Interest for 12 months (1 year) is 0.01 * 12 = 0.12. Rate = 0.12 / 1 * 100 = 12%.

AI explanation

One paisa is Rs. 0.01 and one month is 1/12 of a year. Using the simple interest formula Principal times Rate times Time divided by 100 equals Interest, we get 1 times R times 1 divided by 12 divided by 100 equals 0.01. Solving this gives R divided by 1200 equals 0.01, so the annual rate of interest is 12 percent.

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