# What was the Rate of Interest? If

Prakash took a loan of Rs.5,000 for 3 years with simple interest. If after 3 years he paid Rs.6,000 including the principal and the interest accrued, what was the rate of interest?

- 8%
- 12%
- 20%
- 6%

**Answer: (1) 8 %**

**Explanation:-**

**Given-**

Principal = Rs.5000, Amount = Rs.6200, time = 3 years, Rate = ?

Simple interest = 6200 – 5000

= Rs.1200

**Formula-**

**Simple interest = P x R x T/100**

**Where, P = principal, R = rate, T = time.**

Then, 1200 = 5000 x R x 3/100

3 R = 120/5

R = 8 %

Hence the answer is (1) 8 %.