Question : Kanchan lent INR 10,000 for 2 years and INR 5,000 for 4 years at the same rate of simple interest. If the total interest received by Kanchan is INR 2,000, then what was the rate of interest?
Option 1: 5%
Option 2: 2%
Option 3: 3%
Option 4: 4%
Correct Answer: 5%
Solution :
Let's denote the rate of interest as
The simple interest (SI) can be calculated using the formula
For the first loan of INR 10,000 for 2 years:
For the second loan of INR 5,000 for 4 years:
Also,
The total interest received is the sum of the interest from both loans:
Given that the total interest is INR 2,000:
⇒
⇒
⇒
Hence, the correct answer is 5%.