A sum of 6000 is divided between two brothers such that the simple interest on the amount for 2 years at 5% per annum for elder brother is equal to the simple interest on the amount for 3 years at 10% per annum for younger brother. Find the ratio between the interest occurred by elder and younger brother when compounded annually while keeping the remaining parameters same?
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1 : 1
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3 : 1
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203 : 211
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615 : 662
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Cannot be determined.
D
Correct answer
Explanation
Let elder brother get amount E and younger get amount Y, with E + Y = 6000. Simple interest equality: E × 5 × 2 = Y × 10 × 3, giving 10E = 30Y or E = 3Y. Substituting: 4Y = 6000, so Y = 1500, E = 4500. Compound interest for elder after 2 years at 5%: 4500(1.05)² - 4500 = 461.25. Compound interest for younger after 3 years at 10%: 1500(1.1)³ - 1500 = 496.5. Ratio = 461.25 : 496.5 = 615 : 662 after multiplying by 4/3.