Rakesh fixes the rate of interest 6% per annum for first 3 years and for the next 4 years, 7 percent per annum and for the period beyond 7 years, 7.5 percent per annum. If Mr. Rakesh lent out Rs.1500 for 11 years, find the total interest earned by him?a)Rs.1100b)Rs.1200c)Rs.1140d)Rs.1350e)None of the AboveCorrect answer is option 'C'. Can you explain this answer?

Question

Answer

Given:
Rate of interest for the first 3 years = 6% per annum
Rate of interest for the next 4 years = 7% per annum
Rate of interest for the period beyond 7 years = 7.5% per annum
Principal amount (P) = Rs. 1500
Time period (T) = 11 years

To find: Total interest earned by Mr. Rakesh.

Explanation:
To find the total interest earned by Mr. Rakesh, we need to calculate the interest for each period and then add them together.

1. Interest for the first 3 years:
Principal (P) = Rs. 1500
Rate of interest (R) = 6% per annum
Time period (T) = 3 years

Using the simple interest formula, the interest for the first 3 years can be calculated as:
Interest = (P * R * T) / 100
= (1500 * 6 * 3) / 100
= Rs. 270

2. Interest for the next 4 years:
Principal (P) = Rs. 1500
Rate of interest (R) = 7% per annum
Time period (T) = 4 years

Using the simple interest formula, the interest for the next 4 years can be calculated as:
Interest = (P * R * T) / 100
= (1500 * 7 * 4) / 100
= Rs. 420

3. Interest for the period beyond 7 years:
Principal (P) = Rs. 1500
Rate of interest (R) = 7.5% per annum
Time period (T) = 11 - (3 + 4) = 4 years (remaining time period after the first 7 years)

Using the simple interest formula, the interest for the period beyond 7 years can be calculated as:
Interest = (P * R * T) / 100
= (1500 * 7.5 * 4) / 100
= Rs. 450

4. Total interest earned by Mr. Rakesh:
Total interest = Interest for the first 3 years + Interest for the next 4 years + Interest for the period beyond 7 years
= Rs. 270 + Rs. 420 + Rs. 450
= Rs. 1140

Therefore, the total interest earned by Mr. Rakesh is Rs. 1140. Hence, option C is the correct answer.

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