Question

Ramesh borrowed $Rs7000$ from a bank on simple interest for a period of $5$ years. He returned $Rs3000$ to the bank at the end of three years and $Rs5450$ at the end of the five years and closed the account. Find the rate of interest per annum.

• A. $4\%$
• B. $5\%$
• C. $6\%$
• D. $8\%$

Answer 1

The correct option is B $5\%$

Let the rate of interest $=R$.

In the first 3yrs,

principal $=P=Rs7000$, Time $T=3yrs$.

Then the interest =$I_1=\frac{PRT}{100}=\frac{7000\times R\times 3}{100}=210R.$

In the next (5-3)yrs=2yrs,

Pricipal $=P=RS(7000-3000)=RS4000$, Time $=T=2yrs.$

Then, the interest=$I_2=\frac{PRT}{100}=\frac{4000\times R\times 2}{100}=80R.$

$\therefore$ the total amount returned this time

=$Rs(4000+I_1+I_2)=Rs5450⟹4000+210R+80R=5450⟹29R=1450⟹R=5p.c.p.a.$

So the rate of interest=5% p.a.