Question : Ramesh borrowed INR 15,000 at a certain rate of simple interest from a bank. He repaid (the principal but not interest) INR 6,000 after 5 years, and after 5 more years he paid INR 18,600 and settled his account. Find the rate of simple interest per annum.
Option 1: 12%
Option 2: 10%
Option 3: 8%
Option 4: 6%
Correct Answer: 8%
Solution :
Total amount = 6000 + 18600 = 24600
Principal sum, $P = 15000$
Simple interest = Total amount - principal sum = 24600 - 15000 = 9600
$n_1 = 5$ years
$n_2 = 5$ years
$P_2$ = 15000 - 6000 = 9000
Total simple interest = $\frac{P_1n_1R_1}{100} + \frac{P_2n_2R_2}{100}$
$9600 = \frac{15000 × 5 × R}{100} + \frac{9000 × 5 × R}{100}$
⇒ $9600 = \frac{24000 × 5 × R}{100}$
⇒ $R = \frac{960000}{120000} = 8$%
Hence, the correct answer is 8%.
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