Question 45

Mr. Pinto invests one-fifth of his capital at 6%, one-third at 10% and the remaining at 1%, each rate being simple interest per annum. Then, the minimum number of years required for the cumulative interest income from these investments to equal or exceed his initial capital is


Correct Answer: 20

Solution

Let the total investment me 15x and the no. of years required be T years

$$\frac{\left(3x\times6\times T\right)}{100}+\frac{\left(5x\times10\times T\right)}{100}+\frac{\left(7x\times1\times T\right)}{100}\ge15x$$

or, $$\frac{75xT}{100}\ge15x$$

or, $$T\ge20$$

So minimum value of T is 20 years

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