Karun borrowed ₹12,000 from Varun and ₹15,000 from Tarun, each for two years at the same rate of simple interest per annum. If he paid an interest of ₹1,680 to Varun at the end of 2 years, then what is the interest that Karun paid to Tarun at the end of the 2-year period?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. ₹2,100
Let the rate of interest be r % per annum.
Simple interest (S.I.) for the amount borrowed from Varun = (Principal × Rate × Time) / 100
= (12000 × r × 2) / 100 = 240r
Given, S.I. for the amount borrowed from Varun = ₹1,680
Therefore, 240r = 1680
r = 7
So, the rate of interest is 7% per annum.
Now, we can calculate the simple interest paid to Tarun using the same formula as above:
S.I. for the amount borrowed from Tarun = (Principal × Rate × Time) / 100
= (15000 × 7 × 2) / 100
= ₹2,100
Therefore, the interest that Karun paid to Tarun at the end of the 2-year period is ₹2,100.