Question : Rohan borrows a certain sum at simple interest. The rate of interest is 3 percent per annum for the first 3 years, 4 percent per annum for the next 5 years, and 6 percent per annum for the next 7 years. If he paid Rs. 2485 as interest, then what is the sum borrowed?
Option 1: Rs. 2500
Option 2: Rs. 3500
Option 3: Rs. 4000
Option 4: Rs. 3600
Correct Answer: Rs. 3500
Solution :
Use the formula below.
Simple interest =
Let's denote the principal amount (the sum borrowed) as P
Simple interest for the first 3 years at 3 percent per annum
=
Simple interest for the next 5 years at 4 percent per annum
=
Simple interest for the next 7 years at 6 percent per annum
=
Total Interest =
⇒ 2485 =
⇒ 248500 = 71P
⇒ P =
Hence, the correct answer is Rs. 3500.
