Harish borrows 2,500 at 3% per annum for 1st year and 21,000 at 5% per annum interest for 2nd year. The interest Harish will have to pay after two years is Rs. ____.

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Detailed Solution

Concept- The interest Harish will have to pay after two years is Rs.1125. Given, Harish borrows 2500 at 3% per annum for 1 year and 21,000 at 5% per annum for the next 1 year.
In case of Simple Interest, Interest =

Where, P = Principle on which Interest in compounded
R = Rate of Simple Interest per annum
T = Time period of interest.
We have to calculate individual interests on 2500 at 3% per annum for 1 year time period and on 21,000 at 5% per annum, also for 1 year time period and add up both the interests.
For principle of 2500 at 3% per annum for 1 year time period, Interest =

Interest = Rs. (25

3)
Interest = Rs. 75
For principle of 21,000 at 5% per annum for 1 year time period,
Interest =

Interest = Rs. (210

5)
Interest = Rs. 1050
Therefore, total interest to be paid by Harish after 2 years = Rs. (75 + 1050)
= Rs. 1125
Hence, the correct answer is Rs. 1125.

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