Question 61

Mr. Mehra is planning for higher education expenses of his two sons aged 15 and 12. He plans to divide Rs 15 lakhs in two equal parts and invest in two different plans such that his sons may have access to Rs 21 lakhs each when they reach the age of 21. He is looking for plans that will give him a simple interest per annum. The rates of interest of the plans for his younger son and his elder son should be

Solution

Rs. 15 lakhs is to be divided equally.

In the case of the younger son,
Principal = Rs. 750000, time = 9 years and Interest = Rs. 1350000
Rate of interest = $$\dfrac{1350000 * 100}{750000 * 9}$$ = 20%

In the case of the elder son,
Principal = Rs. 750000, time = 6 years and Interest = Rs. 1350000
Rate of interest = $$\dfrac{1350000 * 100}{750000 * 6}$$ = 30%

Hence, option E is the correct answer.

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