Anil invests Rs 22000 for 6 years in a scheme with 4% interest per annum, com pounded half-yearly. Separately, Sunil invests a certain amount in the same scheme for 5 years, and then reinvests the entire amount he receives at the end of 5 years, for one year at 10% simple interest. If the amounts received by both at the end of 6 years are equal, then the initial investment, in rupees, made by Sunil is:
Correct Answer :
20808
Solution :
The correct option is 20808.
To find the initial investment made by Sunil, we analyze the growth of both investments over the 6-year period and set their final amounts equal.
Step 1: Identify the interest rate per compounding period
The scheme has an annual interest rate of 4% compounded half-yearly.
Since interest compounding occurs twice a year, the rate of interest per half-year period is:
Step 2: Calculate the final amount received by Anil
Anil invests Rs 22,000 for 6 years in this scheme.
The number of half-yearly compounding periods over 6 years is:
Using the compound interest formula, the total amount received by Anil at the end of 6 years is:
Step 3: Calculate the final amount received by Sunil
Let Sunil's initial investment be P. He invests this amount in the same scheme for 5 years.
The number of compounding periods for Sunil's initial investment is:
The accumulated amount Sunil receives at the end of 5 years is:
Sunil then reinvests this entire amount for 1 year at 10% simple interest.
The final amount received by Sunil at the end of 6 years is:
Substituting and year:
Substituting the expression for :
Step 4: Equate both amounts and solve for P
We are given that the amounts received by both Anil and Sunil at the end of 6 years are equal:
Substitute the values:
Divide both sides by :
Now, solve for P:
Simplify the division:
This gives:
Compute the square:
Finally, calculate the value of P:
Therefore, the initial investment made by Sunil is Rs 20,808.
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