Question

A's capital exceeds B's capital by 20.5%. B invests his capital at 20% p.a. for 3 years, interest
compounded annually. At what rate percentage p.a, must A invest his capital at simple interest, so that at the
end of 3 years, both get the same amount (in INR)? (Correct to one decimal place)
0 14.5
O 15.2
O 13.8
O 14.2

Answer 1

Answer:

14.5

Step-by-step explanation:

B:

Principal(P): x (say)

Time(n): 3 years

Rate(r): 20% p.a.

Amount= P(1+r/100)^n

=x(1+20/100)^3

=1.728x

A:

Principal(p): 1.205x (20.5% more than P)

Time(t): 3 years

Rate(R): y p.a. (say)

Amount= p(1+R*t/100)

Now, Amount of A = Amount of B

So, 1.205x{1+(y * 3/100)} = 1.728 x

1+0.03y = 1.728/1.205

0.03y = 1.434-1

y = 0.434/0.03

y = 14.46

Do, y = 14.5 (Corrected to one decimal place)