Nitu has an initial capital of ₹20,000. Out of this, she invests ₹8,000 at 5.5% in bank A, ₹5,000 at 5.6% in bank B and the remaining amount at x% in bank C, each rate being simple interest per annum. Her combined annual interest income from these investments is equal to 5% of the initial capital. If she had invested her entire initial capital in bank C alone, then her annual interest income, in rupees, would have been
Started 3 months ago by Shashank in
Explanatory Answer
If Neetu intended to get a 5% annual interest, ideally all the banks should have maintained a 5% interest rate.
But Bank A returns 0.5% extra interest on 8000 rupees, which is 40 rupees.
But Bank B returns 0.6% extra interest on 5000 rupees, which is 30 rupees.
A & B combines are paying 70 rupees extra than 5%.
So Bank C should maintain such an interest rate that, the interest generated on the remaining 7000 rupees is 70 less than 5% interest.
Since 70 is 1% of 7000. The interest rate at Bank C should be 5% - 1% = 4%
If all the 20,000 rupees were invested in Bank C, the interest generated is 4% of 20,000 = 800 rupees.
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