A sum of Rs. 1200 is lent to be paid back in 5 equal annual instalmens of Rs. 264 each. The rate of interest per annum is
रू0 1200 की धनराशि उधार दी जाती है जिसे रू0 264 की 5 बराबर की वार्षिक किश्तों में लौटाया जाना है। वार्षिक ब्याज दर ज्ञात कीजिए?

Options

A. 0.06
B. 0.1
C. 0.02
D. 0.04

Explanation

To find the rate of interest per annum for the given loan scenario, we can follow these steps:

### Step 1: Identify the Given Values
- Principal (P) = Rs. 1200
- Annual installment (A) = Rs. 264
- Number of installments (n) = 5

### Step 2: Calculate the Total Amount Paid
The total amount paid back after 5 years is:
\[ \text{Total Amount} = \text{Annual Installment} \times \text{Number of Installments} = 264 \times 5 = Rs. 1320 \]

### Step 3: Calculate the Simple Interest (SI)
The simple interest can be calculated using the formula:
\[ \text{SI} = \text{Total Amount} - \text{Principal} = 1320 - 1200 = Rs. 120 \]

### Step 4: Use the Simple Interest Formula
The formula for simple interest is:
\[ \text{SI} = \frac{P \times R \times T}{100} \]
Where:
- SI = Simple Interest (Rs. 120)
- P = Principal (Rs. 1200)
- R = Rate of Interest (unknown)
- T = Time (5 years)

### Step 5: Substitute Known Values into the Formula
Substituting the known values into the simple interest formula gives:
\[ 120 = \frac{1200 \times R \times 5}{100} \]

### Step 6: Simplify the Equation
First, multiply both sides by 100 to eliminate the fraction:
\[ 12000 = 1200 \times R \times 5 \]
Now, simplify the right side:
\[ 12000 = 6000R \]

### Step 7: Solve for R
To find R, divide both sides by 6000:
\[ R = \frac{12000}{6000} = 2 \]

### Step 8: Convert R to Percentage
Since R is in decimal form, to convert it to a percentage, we multiply by 100:
\[ \text{Rate of Interest} = 2\% \]

### Final Answer
The rate of interest per annum is **2%**.

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