Calculation of Interest on Loan

Given Information:
Principal Amount (P) = 150000
Rate of Interest (R) = 12%
Time (T) = 1 year (from 1st January 2016 to 31st December 2016)

Calculation of Interest:
Simple Interest = (P * R * T) / 100
= (150000 * 12 * 1) / 100
= 18000

Therefore, the interest on the loan is 18000.

Explanation of Simple Interest

Simple Interest is the interest charged on the principal amount for a specific period of time. It is calculated as a percentage of the principal amount.

In the given question, Ramesh lent 150000 to Deepak on 1st January 2016, at the rate of 12% per annum. This means that Deepak has to pay back the principal amount of 150000 along with the interest of 12% per annum.

To calculate the interest, we need to use the formula of Simple Interest, which is (P * R * T) / 100, where P is the principal amount, R is the rate of interest, and T is the time period for which the interest is calculated.

In this case, the time period is 1 year, as the loan was given on 1st January 2016 and needs to be repaid on 31st December 2016. Therefore, we substitute the values of P, R, and T in the formula to calculate the interest.

The interest on the loan is 18000, which means that Deepak has to pay back 168000 (150000 + 18000) to Ramesh on 31st December 2016.