A man borrowed ₹29,000 for 3 years and ₹45,000 for 5 years at the same rate of simple interest. If he paid a total interest of ₹62,400, then what was the rate of interest?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 20%.
Let the rate of interest be R% per annum.
Simple Interest = (Principal × Rate × Time) / 100
For the first loan: Interest = (29000 × R × 3) / 100 = 870R
For the second loan: Interest = (45000 × R × 5) / 100 = 2250R
Total interest paid = 870R + 2250R = 62400
Combining the terms: 3120R = 62400
Solving for R: R = 62400 / 3120 = 20
Therefore, the rate of interest is 20% per annum.