Anil lent a sum of ₹ 5,000 on simple interest for 10 years in such a way that the rate of interest is 6 % per annum for the first 2 years, 8 % per annum for the next 2 years and 10 % per annum beyond 4 years. How much interest (in ₹) will he earn at the end of 10 years?
Answer & explanation
Correct answer: option 2
Principal(P)=Rs 5000
Time(T)=10 years
Rate (for first 2 years)= 6% × 2 = 12%
Rate (for next 2 years)= 8% × 2 = 16% and
Rate (for next 6 years)= 10% × 6 = 60%
Total rate of Int. for 10 years = 12 + 16 + 60 = 88%
Simple interest = 88% of Principal
= \(\frac{88}{100}\)×5000 = Rs 4400