A person borrows a sum of ₹16,000 on simple interest at the beginning of a year. After 4 months, ₹24,000 more is borrowed at a rate of interest double the previous one. At the end of the year, the total interest on both the loans is ₹4800. What is the initial rate of interest per annum?
A.8%
B.10%✓ Correct
C.12%
D.16%
Explanation
Let the initial rate be R% per annum. Interest on first loan for 12 months = 16000 × R × 1/100 = 160R. Interest on second loan (₹24,000) at rate 2R% for 8 months = 24000 × 2R × 8/(100 × 12) = 320R. Total interest = 160R + 320R = 480R. Given 480R = 4800, so R = 10%. Hence the initial rate of interest is 10% per annum.
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