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    A person borrowed Rs. 2500 for 2 years and Rs. 2000 for 3 years at the same rate of simple interest. If he paid a total interest of Rs. 550, then the
    Question

    A person borrowed Rs. 2500 for 2 years and Rs. 2000 for 3 years at the same rate of simple interest. If he paid a total interest of Rs. 550, then the annual rate of interest was:

    A.

    10%

    B.

    2%

    C.

    5%

    D.

    8%

    Correct option is C


    Solution:
    Simple Interest = (Principal × Rate × Time) / 100
    Interest on Rs. 2500 for 2 years = (2500 × R × 2) / 100 = 50R
    Interest on Rs. 2000 for 3 years = (2000 × R × 3) / 100 = 60R
    Total interest given:
    50R + 60R = 110R
    Given total interest = 550
    So, 110R = 550 R = 5
    Correct answer:
    (c) 5%

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