Question

Mr. Garg lent Rs. 150,000 to his friend. He charged 15 percent per annum on Rs. 12,500 and 18 percent on the rest. How much, in total, did he earn as interest?

(a) Rs. 21,750
(b) Rs. 22,500
(c) Rs. 23,250
(d) Rs. 24,000

Answer 1

Mr. Garg earned a total interest of Rs. 26,625 from lending Rs. 150,000, by charging 15% on Rs. 12,500 and 18% on the remaining Rs. 137,500. The given options might contain an error as none match the calculated interest.

Step-by-step explanation:

To calculate the total interest Mr. Garg earned, we need to calculate the interest on both portions of the loan separately and then add them together. There are two interest rates applied to two different loan amounts. First, we calculate the interest on Rs. 12,500 at a 15% annual rate:

Interest on Rs. 12,500:
Interest = Principal × Rate × Time
Interest = Rs. 12,500 × (15/100) × 1
Interest = Rs. 18,75

Next, we calculate the interest on the remaining amount, which is Rs. 150,000 - Rs. 12,500 = Rs. 137,500 at an 18% annual rate:

Interest on Rs. 137,500:
Interest = Principal × Rate × Time
Interest = Rs. 137,500 × (18/100) × 1
Interest = Rs. 24,750

Now, we add both interest amounts to get the total interest:

Total Interest = Interest on Rs. 12,500 + Interest on Rs. 137,500
Total Interest = Rs. 1875 + Rs. 24750
Total Interest = Rs. 26,625

Hence, Mr. Garg earned a total interest of Rs. 26,625, which is not one of the options provided. Therefore, the given options might have a typo or an error. The calculated total interest earned is Rs. 26,625, adhering to the given interest rates.