Question

Priya borrowed ₹40,000 from two lenders under simple-interest terms: Lender M charges 8% p.a. (simple interest), Lender N charges 5% p.a. (simple interest) Priya kept both loans for exactly 5 years and then paid the accumulated interest, which was ₹14,000. If she had interchanged the principal amounts, her five-year interest outgo would have been ₹2,000 less. How much did she borrow from Lender M at 8% p.a.?

• A. ₹25000
• B. ₹22000
• C. ₹26,667
• D. ₹16000

Answer 1

Answer:

C. ₹26,667

Let the amount borrowed from Lender M (8% p.a.) be ₹(x).

Then the amount borrowed from Lender N (5% p.a.) is:

40000 - x.

Method 1: Using the total interest

For 5 years, the simple interest rates become:

• 8% × 5 = 40%

• 5% × 5 = 25%

So,

0.40x + 0.25(40000-x) = 14000.

Simplifying,

0.40x + 10000 - 0.25x = 14000

0.15x = 4000

$x = \frac{4000}{0.15} =\approx 26,667.$