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Question : Kanchan lent INR 10,000 for 2 years and INR 5,000 for 4 years at the same rate of simple interest. If the total interest received by Kanchan is INR 2,000, then what was the rate of interest?

Option 1: 5%

Option 2: 2%

Option 3: 3%

Option 4: 4%


Team Careers360 22nd Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: 5%


Solution : Let's denote the rate of interest as $R$.
The simple interest (SI) can be calculated using the formula $SI=\frac{P×R×T}{100}$​, where P is the principal amount, R is the rate of interest, and T is the time in years.
For the first loan of INR 10,000 for 2 years: $SI_1​=\frac{10,000×R×2}{100}$​
For the second loan of INR 5,000 for 4 years: $SI_2​=\frac{5,000×R×4​}{100}$
Also,
The total interest received is the sum of the interest from both loans: $SI_1​+SI_2​=\frac{10,000×R×2}{100}+\frac{5,000×R×4​}{100}$
Given that the total interest is INR 2,000: $\frac{10,000×R×2}{100}+\frac{5,000×R×4​}{100}=2000$
⇒ $200×R+200×R=2,000$
⇒ $400×R=2,000$
⇒ $R=5\%$
Hence, the correct answer is 5%.

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