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    Question

    A businessman took a loan at 25% p.a. simple interest.

    After 40 months, he repaid Rs. 12,500 to clear the loan. Find the principal amount borrowed.
    A Rs.5280 Correct Answer Incorrect Answer
    B Rs.5775 Correct Answer Incorrect Answer
    C Rs.6818 Correct Answer Incorrect Answer
    D Rs.6300 Correct Answer Incorrect Answer

    Solution

    ATQ,

    Let the borrowed amount be Rs ‘x’.

    ATQ;

    (12500 – x) = (x × 25 × 40) ÷ (100 × 12)

    Or, (12500 – x) = (25x/30)

    Or, 12500 = {(25x/30) + x}

    Or, 12500 = (55x/30)

    So, x = 6818

    Therefore, the borrowed amount was Rs. 6,818.

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