Question 75

A sum of 8,448 is to be divided between A and B who are respectively 18 and 19 years old, in such a way that if their shares be invested at 6.25% per annum compound interest they will receive equal amounts on attaining the age of 21 years the present share of A is

Solution

Let share of A is 'x' and that of B is (8448 - x)

Amount received by A and B is same. Hence, equation can be written as

x(1 + $$\frac{6.25}{100})^{3}$$ = (8448 - x)(1 + $$\frac{6.25}{100})^{2}$$

x + $$\frac{6.25}{100}$$x = 8448 - x

100x + 6.25x = 844800 - 100x

206x = 844800

x = 4096

Hence, option C is the correct answer.

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