Sitaram, a money lender lent a part of Rs 200000 to Shyam at simple interest 6% p.a. and the remaining to Sushil at 10% p.a. at simple interest. Sitaram earned an annual interest income of Rs. 18000. Based on the given information answer the following questions :
What amount of money is lent at 10% p.a. simple interest?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Rs. 1,50,000
Let Rs A be lent at 10%. Then Rs (200000 − A) is lent at 6%, and the simple interest for one year adds up to Rs 18000:
\(0.10A + 0.06(200000 - A) = 18000\)
\(0.10A + 12000 - 0.06A = 18000\)
\(0.04A = 6000\)
\(A = 150000\)
So Rs. 1,50,000 is lent at 10% p.a.