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
Question:
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
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
Options
Answer: (3) 20
Explanation:
Let capital = C. Investment: C/5 at 6%, C/3 at 10%, remaining 7C/15 at 1%. Annual interest = C/5×0.06 + C/3×0.1 + 7C/15×0.01 = 0.012C + 0.0333C + 0.00467C = 0.05C. Time = C/0.05C = 20 years.
Explanation:
Let capital = C. Investment: C/5 at 6%, C/3 at 10%, remaining 7C/15 at 1%. Annual interest = C/5×0.06 + C/3×0.1 + 7C/15×0.01 = 0.012C + 0.0333C + 0.00467C = 0.05C. Time = C/0.05C = 20 years.
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