Final answer:
The rate of interest in percentage per year is 12%. The correct answer is b. 12%.
Step-by-step explanation:
When calculating the annual interest rate based on a monthly rate, you multiply the monthly rate by the number of months in a year to get the annual rate. In the given scenario, if the rate of interest is 1 paisa per rupee per month, then over a year (which contains 12 months), this would amount to 12 paise per rupee per annum.
To express the interest rate in percentage per year, we need to multiply the rate of interest by 12 to convert it from monthly to yearly rate. The rate of interest is given as 1 paisa per rupee per month. Since 1 paisa is equal to 0.01 rupee, the monthly rate can be written as 0.01 rupee per rupee per month.
Multiplying this by 12 gives the annual rate as 0.01 rupee per rupee per month multiplied by 12 = 0.12 rupee per rupee per year.
To express this as a percentage, we can multiply by 100. So, 0.12 rupee per rupee per year can be written as 0.12 * 100 = 12%. Therefore, the rate of interest in percentage per year is 12%.