Correct Answer - Option 2 : Rs. 2,000
Given:
Total interest received after 5 years = Rs.1750
Formula:
Let P = Principal, R = rate of interest and N = time period
Simple interest = PNR/100
Calculation:
Let amount lent out at 10% simple interest be Rs.a.
Amount lent out at 5% simple interest = Rs(5000 - a)
⇒ 1750 = (a × 10 × 5)/100 + [(5000 - a) × 5 × 5/100]
⇒ 1750 × 100/5 = 10a + 25000 - 5a
⇒ 5a = 10000
⇒ a = 2000
∴ Amount lent out at 10% simple interest is Rs.2000.