What is the simple interest (in Rs) on a principal of Rs 12000 at the rate of 2% per annum for 2 years?

Options

A. 500
B. 240
C. 480
D. 550

Answer

To calculate the simple interest on a principal amount, we can use the formula:

\[ \text{Simple Interest (SI)} = \frac{P \times R \times T}{100} \]

Where:
- \( P \) = Principal amount
- \( R \) = Rate of interest per annum
- \( T \) = Time in years

Given:
- Principal \( P = 12000 \) Rs
- Rate \( R = 2\% \) per annum
- Time \( T = 2 \) years

Now, let's substitute the values into the formula:

1. Substitute the values into the formula:
\[ SI = \frac{12000 \times 2 \times 2}{100} \]

2. Calculate the multiplication in the numerator:
\[ SI = \frac{12000 \times 4}{100} \]

3. Now, simplify the fraction:
\[ SI = \frac{48000}{100} \]

4. Finally, divide to find the simple interest:
\[ SI = 480 \]

Thus, the simple interest on a principal of Rs 12000 at the rate of 2% per annum for 2 years is Rs 480.