A borrows ₹20,000 from B and C. B lends him a certain sum of money at 25% simple interest per annum, while C lends him the remaining sum of money at 21% simple interest per annum. The total interest paid by A in one year is ₹4,500. The sum (in ₹) borrowed from B is:
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 7,500.
Let the amount borrowed from B be ₹x.
Then, the amount borrowed from C is ₹(20,000 - x).
Simple Interest (SI) = Principal (P) × Rate (R) × Time (T) / 100
Interest paid to B in one year = x × 25 × 1 / 100 = 0.25x
Interest paid to C in one year = (20,000 - x) × 21 × 1 / 100 = 0.21(20,000 - x)
Total interest paid in one year = ₹4,500
⇒ 0.25x + 0.21(20,000 - x) = 4,500
⇒ 0.25x + 4,200 - 0.21x = 4,500
⇒ 0.04x = 300
⇒ x = 300 / 0.04
⇒ x = 7,500
The sum borrowed from B is ₹7,500.