Arun has taken some money as loan on simple interest for 6 years. The money lender levied interest at 4% per annum for the first 2 years, at 8% per annum for the next 3 years, and at 12% per annum for the period beyond 5 years. If Arun clears his loan by paying ₹5,472, then what was the sum (in ₹) he had taken as a loan?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2, i.e., 3,800.
Let the principal = P ₹
SI = (P × R × T) ÷ 100
Interest for first 2 years at 4% = P × 4 × 2 ÷ 100 = 8P ÷ 100
Interest for next 3 years at 8% = P × 8 × 3 ÷ 100 = 24P ÷ 100
Interest for 6th year at 12% = P × 12 × 1 ÷ 100 = 12P ÷ 100
Total interest = 8P + 24P + 12P ÷ 100 = 44P ÷ 100 = 0.44P
Total amount paid = Principal + Interest = P + 0.44P = 1.44P
Given total amount = 5472
1.44P = 5472 → P = 5472 ÷ 1.44 = 3800