Question 92

Amit borrows ₹7,000 at simple interest from the village money-lender. At the end of 3 years, he again borrows ₹3,000 and closes his account after paying ₹4,615 as interest after 8 years from the time he made the first borrowing. What is the rate of interest?

Solution

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Let rate of interest be $$r\%$$

Amit borrows Rs. 7000 for 3 years and Rs. 10,000 for 5 years

Simple Interest = $$\frac{P\times R\times T}{100}$$

Total interest paid = $$(\frac{7000\times r\times3}{100})+(\frac{10,000\times r\times5}{100})=4615$$

=> $$210r+500r=4615$$

=> $$r=\frac{4615}{710}=6.5\%$$

=> Ans - (C)

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