Question

Ajay lent a certain amount of money to Vinod at simple interest on a certain agreement. Ajay offers 20 percent per annum for first 2 years, 8 percent per annum for the next 3 years and 10 percent for beyond 5 years. Vinod paid ₹ 147200 at the end of 7 years. What is the amount borrowed by Vinod from Ajay?

1. 80000
2. 90000
3. 70000
4. 85000
5. 75000

Answer 1

Correct Answer - Option 1 : 80000

Given:

Rate of interest for first 2 years = 20 percent

Rate of interest for next 3 years = 8 percent

Rate of interest for last 2 years = 10 percent

Formula used:

Simple interest = (P × R × T)/100

Where,

P = Principle amount

R = Rate of interest

T = Time period

Calculation:

P + [{(P × 20 × 2)/100} + {(P × 8 × 3)/100} + {(P × 10 × 2)/100}] = 147200

⇒ P + [{0.4P} + {0.24P} + {0.2P}] = 147200

⇒ P[1 + (0.4 + 0.24 + 0.2)] = 147200

⇒ P[1 + (0.84)] = 147200

⇒ P[1.84] = 147200

⇒ P = 147200/1.84 = 80000

∴ The amount borrowed by Vinod from Ajay is ₹ 80000.