A borrows ₹7,500 for 4 years at 8% p.a. simple interest. B borrows the same amount at simple interest of 9% for the first year, 10% for the second year and 6% for the next two years. What is simple interest paid by A and B in total (in ₹)?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e 4,725.
Simple Interest = (P × R × T) / 100
SI = (7500 × 8 × 4) / 100 = ₹2,400
Interest paid by B:- Year 1: 9% → (7500 × 9 × 1) / 100 = ₹675
Year 2: 10% → (7500 × 10 × 1) / 100 = ₹750
Year 3: 6% → (7500 × 6 × 1) / 100 = ₹450
Year 4: 6% → (7500 × 6 × 1) / 100 = ₹450
Total SI for B = 675 + 750 + 450 + 450 = ₹2,325
Total simple interest paid by A and B = 2400 + 2325 = ₹4,725