Question

Amit borrows some money at the rate of 5% p.a. for the first four years. He borrows the same amount of money at the rate of 10% p.a. for the next two years, and at the rate of 20% per annum for next one year. If he pays a total interest of ₹ 30,000 at the end of six years, how much money did he borrow each time?

• A. ₹ 50,000
• B. ₹ 40,000
• C. ₹ 45,000
• D. ₹ 60,000

Answer 1

The correct option is A ₹ 50,000

Let the sum borrowed each time by Amit be ₹ x.

The Simple Interest earned on a sum of ₹ P for a period of T years at the rate of R % p.a S.I is given by $\frac{P\times R\times T}{100}$.

Hence, the total simple interest that Amit pays =
$\frac{x\times 5\times 4}{100}+\frac{x\times 10\times 2}{100}+\frac{x\times 20\times 1}{100}=30,000$ $\frac{60x}{100}=₹30,000$

Each time Amit borrowed ₹ 50,000.