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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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