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 -
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Rs. 5000
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Rs. 5408
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Rs. 6080
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Rs. 4328
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None of these
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.