A customer has taken three loans from the bank and the tenure of each loan is 5 years

eddy2017

eddy2017

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A customer has taken three loans from the bank and the tenure of each loan is 5 years.

Personal Loan of $ 200,000 at 14% rate of interest
Car Loan of $ 800,000 at 11% rate of interest
Home Loan of 400,000 at 9% rate of interest

What is the rate of interest for the overall $ 500,000?>

can you help me start this exercise?

I know the formula for simple interest but this is asking for the rate of interest. Don't know if it is the same thing.
thanks
 
Can you post a picture of the original question? Did the question state explicitly simple interest? Also, a car loan for $800,000??
Do you mean $80,000?
 
Last edited:
eddy2017 said:
A customer has taken three loans from the bank and the tenure of each loan is 5 years.

Personal Loan of $ 200,000 at 14% rate of interest
Car Loan of $ 800,000 at 11% rate of interest
Home Loan of 400,000 at 9% rate of interest

What is the rate of interest for the overall $ 500,000?>

can you help me start this exercise?

I know the formula for simple interest but this is asking for the rate of interest. Don't know if it is the same thing.
thanks
Click to expand...
At the end of 1 year,

how much interest (money) would he have to pay for the Home loan?​
​
how much interest (money) would he have to pay for the Car loan?​
​
how much interest (money) would he have to pay for the personal loan loan?​

How did we get:

What is the rate of interest for the overall $ 500,000?​

What is that "overall"?
 
Okay, BBB, this is the source. A friend translated the word lakh which is a a unit in the Indian numbering system equal to
one hundred thousand
1 lakh=100,000
he translated the problem for me and sent it. he knows I am a fan of mathematics.



Mean – Practice Exercise 1​

A customer has taken three loans from the bank and the tenure of each loan is 5 years
(Rs = rupees).
  • Personal Loan of Rs. 2 Lakhs at 14% rate of interest
  • Car Loan of Rs. 8 Lakhs at 11% rate of interest
  • Home Loan of Rs. 40 Lakhs at 9% rate of interest
What is the rate of interest for the overall Rs. 50 Lakh?

he put it in dollars for me.
 
There's an answer with the problem but without any formula and I tried to search online for a formula to find interest rate but found some things that did not amount to much in the way of a clear process to a solution for this problem.
I guess the overall 50 laks refers to the sum of all money borrowed 2 lakh + 8 lakh + 40 lakh =50 lakh = $ 500,000
 
eddy2017 said:
There's an answer with the problem but without any formula and I tried to search online for a formula to find interest rate but found some things that did not amount to much in the way of a clear process to a solution for this problem.
I guess the overall 50 laks refers to the sum of all money borrowed 2 lakh + 8 lakh + 40 lakh =50 lakh = $ 500,000
Click to expand...
1) Your friend didn't do the math right. What's 50*100,000?
2) As you said, this is from a friend. It's not in your usual curriculum.
3) Since the problem didn't state how the interest is compounded, we can assume a simple interest as you're familiar with it.
What's the formula?
 
BigBeachBanana said:
1) Your friend didn't do the math right. What's 50*100,000?
2) As you said, this is from a friend. It's not in your usual curriculum.
3) Since the problem didn't state how the interest is compounded, we can assume a simple interest as you're familiar with it.
What's the formula?
Click to expand...
interest= principal * rate * time ( in years)
 
let me try it on my own now that I know is simple interest and not compounded. I'll get back to you.
 
BigBeachBanana said:
1) Your friend didn't do the math right. What's 50*100,000?
2) As you said, this is from a friend. It's not in your usual curriculum.
3) Since the problem didn't state how the interest is compounded, we can assume a simple interest as you're familiar with it.
What's the formula?
Click to expand...
 
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50* 100,000= 5000000

Okay, here's the work
as I told you the formula is
I=Prt (where p =principal, r=rate of interest, t =time in years
[math]I= 200000*14% + 800000*11% + 4000000*9%[/math][math]I=200000 * 0.14 + 800000 * 0.11% + 4000000 * 0.09%[/math][math]I=28000 + 88000 + 360000[/math][math]I=476000[/math]
So now to find the rate of interest for the total of all loans =5000000

[math]I=476000[/math]/5000000[/math]
Total interest of=0.0952 $$
 
Last edited:
NOTE: Principal can be either the amount of investment a person makes or the amount taken out on loan.
 
eddy2017 said:
50* 100,000= 5000000

Okay, here's the work
as I told you the formula is
I=Prt (where p =principal, r=rate of interest, t =time in years
[math]I= 200000*14% + 800000*11% + 4000000*9%[/math][math]I=200000 * 0.14 + 800000 * 0.11% + 4000000 * 0.09%[/math][math]I=28000 + 88000 + 360000[/math][math]I=476000[/math]
So now to find the rate of interest for the total of all loans =5000000

[math]I=476000[/math]/5000000[/math]
Total interest of=0.0952 $$
Click to expand...
47,600 is interest over what period of time? How long is the loan tenure from the OP?
 
Eddy

Is there a context to this problem? I mean, do you know what topic it relates to? I have a very good guess (and I strongly suspect SK and I share the same guess). A lot of math is recognizing what mathematical tools are relevant, but such recognition comes from experience. When you are first learning, a substitute for experience is knowing what topic gave rise to a problem.

The problems you ask about seem to come from all over the place, and this diversity of source gets in the way of your developing a solid base of repeated experience.

This problem obviously comes from an Indian source: rupees were introduced as a monetary unit at least as early as the Mughals, and lahk is a Hindi word. But is there any clue about the general topic?
 
Rectifying
we divide by 5
eddy2017 said:
50* 100,000= 5000000

Okay, here's the work
as I told you the formula is
I=Prt (where p =principal, r=rate of interest, t =time in years
[math]I= 200000*14% + 800000*11% + 4000000*9%[/math][math]I=200000 * 0.14 + 800000 * 0.11% + 4000000 * 0.09%[/math][math]I=28000 + 88000 + 360000[/math][math]I=476000[/math]
So now to find the rate of interest for the total of all loans =5000000

[math]I=476000[/math]/5000000[/math]
Total interest of=0.0952 $$
Click to expand...
I made a mistake, I guess. I left time out of the picture.
 
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