Question

One rupee interest on hundred rupees means how much percentage?

Answer 1

Hint: In the given question, we are given that we receive a certain amount of interest and we have to express the rate of interest in percentage form. We must have a clear knowledge about the core concepts of simple and compound interest along with the technique to calculate percentages in order to tackle such problems. We will first calculate the amount of interest in a year and then calculate the percentage of interest.

Complete step-by-step answer:
In the question, we are given that the interest is one rupee.
So, the rate of interest on the principal amount is one rupee per month. For example: A person borrows hundred rupees at one rupee interest. So, he must pay one rupee interest every month. Now, we know that there are twelve months in a year.
So, in a year, the person will have to pay a total of
$ \operatorname{Re} \,1 \times 12 = Rs\,12 $ .
So, twelve rupees of interest has to be paid in a year on a principal amount of hundred rupees.
Now, we calculate the rate of interest on the principal amount.
We know that the rate of interest is
$ \dfrac{{{\text{Interest}}}}{{{\text{Principal}}}} \times 100\% $ .
So, we get the rate of interest as,
 $ \Rightarrow R = \dfrac{{Rs\,12}}{{Rs\,100}} \times 100\% $
Now, cancelling the numerator and denominator, we get,
 $ \Rightarrow R = 12\% $
So, the rate of interest for one rupee interest per month for a principal amount of thousand rupees is $ 12\% $ per annum.
So, the correct answer is “ $ 12\% $ per annum”.

Note: We should know the actual meaning of the rate of interest. We must express the rate of interest in the units of per annum as it is the standard unit for expressing the rate of interest. We must take care while doing the calculations for finding the value of rate of interest in percent so as to be sure of the final answer. One must also have a strong grip over percentages.