Multiple choice

A man borrowed a loan of Rs. 7000 from the bank at simple interest. After 3 years, he paid Rs. 3000 towards the principal amount borrowed to the bank and he paid the loan by paying Rs. 5450 at the end of the 5th year. Find the rate of interest?

  1. 2%

  2. 3%

  3. 4%

  4. 5%
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

For the first 3 years, interest is on Rs. 7000. For the next 2 years, principal is Rs. 4000. Total payment is 3000 + 5450 = Rs. 8450. Interest = 8450 - 7000 = Rs. 1450. Equation: (7000 × r × 3)/100 + (4000 × r × 2)/100 = 1450. This gives 210r + 80r = 1450, so r = 5%.

Keep practicing — related questions