Question 5

Person A borrows Rs. 4000 from another person B for a duration of 4 years. He borrows a portion of it at 3% simple interest per annum, while the rest at 4% simple interest per annum. If B gets Rs. 520 as total interest, then the amount A borrowed at 3% per annum in Rs. is:


Correct Answer: 3000

Person A borrows Rs. 4,000 from Person B for a period of 4 years.

It is given that he borrows a portion of it at 3% simple interest per annum, while the rest is borrowed at 4% simple interest per annum.

Let the portion borrowed at 3% is P, therefore, the portion borrowed at 4% is 4000-P

Let us calculate the interest earned by them in 4 years for both portions.

For P, rate of interest = 3%, time = 4 years

Interest earned = $$\dfrac{P\times3\times\ 4}{100}$$    ------(1)

Similarly, for 4000-P, rate of interest = 4% and time = 4 years

Interest earned =$$\dfrac{\left(4000-P\right)\times4\times\ 4}{100}$$    -------(2)

Therefore, total interest earned =  (1) + (2)

It is also given that B gets Rs. 520 as total interest.

(1) + (2) = 520

12P+64000-16P = 52000

4P = 12000

P = 3000

Therefore, the amount A borrowed at 3% per annum in Rs. is P = 3000

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