Correct Answer - Option 3 : 4,000

**Given:**

Total Interest paid = Rs. 4,240

Rate of interest for first 3 years = 6%

Rate of interest for next 5 years = 8%

Rate of interest for next 4 years = 12%

**Formula used:**

Simple interest = (Principal × Rate × Time)/100

Where, Simple interest = SI, Rate = R, Time = T

**Calculation:**

As we know that

Simple interest = (Principal × Rate × Time)/100

According to the question

SI_{1} + SI_{2} + SI_{3} = [(P × R_{1} × T_{1})/100] + [(P × R_{2} × T_{2})/100] + [(P × R_{3} × T_{3})/100]

⇒ Rs. 4,240 = [(P × 6 × 3)/100] + [(P × 8 × 5)/100] + [(P × 12 × 4)/100]

⇒ 4240 = (18P/100) + (40P/100) + (48P/100)

⇒ 4240 = 106P/100

⇒ (4240 × 100)/106 = P

⇒ 40 × 100 = P

⇒ Rs. 4,000 = P

**∴ The sum of money he borrowed is Rs. 4,000.**