Select the correct answerIt is decided that a loan of Rs 10, 000 will be paid off at the rate of Rs 800 per month in 15 equal instalments. Find out the rate of return on investment.Options15% P.a.18% P.a.17% P.a.16% P.a.

To solve this problem, we need to understand that the rate of return on investment is essentially the interest rate that the lender is earning on the loan.

Here are the steps to solve this problem:

1. First, we need to calculate the total amount repaid over the 15 months. This is done by multiplying the monthly payment by the number of months: Rs 800 * 15 = Rs 12,000.

2. Next, we subtract the original loan amount from the total repaid to find out how much interest was earned: Rs 12,000 - Rs 10,000 = Rs 2,000.

3. Now, we need to calculate the interest rate. This is done by dividing the interest earned by the original loan amount: Rs 2,000 / Rs 10,000 = 0.2 or 20%.

4. However, this is the interest rate over the 15 month period, not per annum. To find the annual interest rate, we need to adjust this rate to a yearly basis. Since there are 12 months in a year, we divide the 15-month interest rate by 15 and then multiply by 12 to get the annual rate: 20% * (12/15) = 16%.

So, the correct answer is 16% P.a.