Test Index

Time Value of Money

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Question : 80 of 99

Marks: +1, -0

A lent Rs. 6000 to B for 2 years and 1500 to

\mathrm{C}

for 4 years and received total interest of Rs. 900 from both. The rate of interest of Rs. 900 from both. The rate of interest, when simple interest method calculated.

$5\%$
$6\%$
$7.5\%$
$9\%$

Solution:

Concept:

Simple interest formula:

\mathrm{SI} = \frac{P \times r \times t}{100}

.

Explanation:

Let the rate of interest be

r\%

per annum.

Interest from B:

\frac{6000 \times r \times 2}{100} = 120r

.

Interest from C:

\frac{1500 \times r \times 4}{100} = 60r

.

Total interest:

120r + 60r = 180r = 900

.

Thus

r = \frac{900}{180} = 5

.

Answer:

The rate of interest is

5\%

per annum.

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