Kanchan lent ₹10,000 for 2 years and ₹5,000 for 4 years at the same rate of simple interest. If the total interest received by Kanchan is ₹2,000, then what was the rate of interest?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 5%
Formula used:
SI = PRT/100
Where P = principal, SI = simple interest, R = rate and T = time period
Calculations:
Let the rate of interest be R.
According to the question;
⇒ 2000 = [(10000 × 2 × R)/100] + [(5000 × 4 × R)/100]
⇒ 2000 = 200R + 200R
⇒ 2000 = 400R
⇒ R = 5%