Iift 2020 Question 7
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IIFT
Let the rate of interest of first borrowing be R% p.a.
The principal of first borrowing is kept for an entire 12 month span.
Hence, simple interest payable on it at end of financial year = (12,00,000*1*R)/100 = 12,000*R rupees
Now, rate of second borrowing = 0.9R % p.a.
The principal of second borrowing is kept for 8 months total till financial year end.
Hence, simple interest payable on it at end of financial year = (9,00,000*R*8)/(12*100) = 5400R rupees
Now, 12000R + 5400R = 1,39,200
Hence, R = 8% p.a.