A cooperative bank lent ₹4000 to Anand at the rate of x% p.a. under simple interest and 5000 to Milind at (x + 0.5)% p.a. under simple interest. After 2 years the bank received 860 as total interest from Anand and Milind. Find the rate of interest per annum at which the amount was lent to Milind.

You want to know the interest rate Milind was charged if ₹4000 was lent to Anand at x% and ₹5000 was lent to Milind at (x+.5)% for a total amount of simple interest after 2 years of ₹860.

Interest

The interest in each case is computed as ...

I = Prt

where P is the amount of the loan at rate r for t years.

If m is Milind's interest rate, then we have ...

860 = 4000(m-0.5%)(2) +5000m(2)

860 = 18000m -40

900 = 18000m

m = 900/18000 = 0.05

Milind's interest rate was 5%.