If the simple interest on a certain sum of money borrowed for 4 years at 9.5% per annum exceeds the simple interest on the same sum for 3 years at 12.5% per annum by ₹225, then the sum borrowed is:
Answer & explanation
Correct answer: option 2
Principal is same = P
We know ,
Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)
ATQ,
\(\frac{P×9.5 × 4 }{100}\) - \(\frac{P×12.5 × 3 }{100}\) = 225
38P - 37.5P = 22500
0.5P = 22500
P = \(\frac{22500 }{0.5 }\)
= Rs. 45000