After 4 years, a principal amount of Rs. 12000 grows into Rs. 14400. Find out the rate of simple interest.?

Appeared in: HPSSC - 2015

Explanation

The first step is to calculate the total simple interest earned over the 4-year period by subtracting the principal from the final amount (Rs. 14400 - Rs. 12000 = Rs. 2400).
The simple interest formula is SI = (P × R × T) / 100, where P is principal, R is rate, and T is time.
Rearranging the formula to solve for the rate (R) gives R = (SI × 100) / (P × T).
Substituting the known values: R = (2400 × 100) / (12000 × 4) = 240000 / 48000 = 5%.

Option A: A rate of 3% would only yield Rs. 1440 in interest over 4 years (12000 * 0.03 * 4), resulting in a final amount of Rs. 13440, which is incorrect.
Option B: A rate of 4% would yield Rs. 1920 in interest over 4 years (12000 * 0.04 * 4), resulting in a final amount of Rs. 13920, which is incorrect.
Option D: A rate of 6% would yield Rs. 2880 in interest over 4 years (12000 * 0.06 * 4), resulting in a final amount of Rs. 14880, which is incorrect.

Clinical Relevance

Nursing practice connection: This is primarily an exam-oriented knowledge point with limited direct bedside application, so retain Calculating the rate of simple interest as background academic context rather than a clinical decision trigger.
Not applicable for this non-clinical, mathematics-based question.
What if? - If the stem changed one defining clue so that 5% no longer matched, reassess the option whose mechanism, classification, or indication now fits the revised presentation.

How to Approach the Question

First, identify all the given values in the problem: Principal (P), Final Amount (A), and Time (T).
Calculate the Simple Interest (SI) by finding the difference between the final amount and the principal (SI = A - P).
Recall the formula for Simple Interest: SI = (P × R × T) / 100.
Rearrange this formula to solve for the unknown variable, which is the Rate (R) in this case: R = (SI × 100) / (P × T).
Substitute the known values into the rearranged formula and calculate the result.
Compare the calculated rate with the given options to find the correct answer.

Concept Tested & Keywords

Concept Tested: Calculating the rate of simple interest.
Stem keywords: principal amount, Rs. 12000, grows into, Rs. 14400, 4 years, rate of simple interest
Lead-in keywords: Find out

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