Multiple choice

Rs. 10408 is divided between Aastha and Naimish so that the amount that Aastha receives in 4 years is the same as that Namish receives in 6 years. If the interest is compounded annually at the rate of 4% per annum then Aastha's share is -

  1. Rs. 5000

  2. Rs. 5408

  3. Rs. 6080

  4. Rs. 4328

  5. None of these

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let Aastha's share be x. Then Naimish gets 10408-x. Aastha's amount after 4 years = x(1.04)^4. Naimish's amount after 6 years = (10408-x)(1.04)^6. Equating: x(1.04)^4 = (10408-x)(1.04)^6. This simplifies to x = (10408-x)(1.04)^2. Solving: x ≈ 5408. At 4% compound interest, Aastha needs about Rs. 5408 initially to equal Naimish's amount in 2 fewer years.