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sabbavarapu madhu

· started a discussion

· 1 Months ago

solution (Question: 249209.0 )

please provide clear solution

Question:
A’s salary is  \(\cfrac{91}{125}\) times more than the salary of B. B spends his salary at 10% per annum. At what rate should A spend his salary so that after 3 years they are left with the same amount while they spend on compound interest basis? 
Options:
A) 20%
B) 25%
C) \(33\cfrac{1}{3}\%\)
D) \(33\cfrac{1}{2}\%\)
Solution:
Ans: (b)


Knowledge Expert

· commented

· 1 Months ago

Dear Student,

As mentioned in the question , A's salary is 91/125 times more than B's salary.
So their ratio will be 216 : 125
As they are spending at compound interest and after 3 yrs the amount left are same .
So we will use the formula
P ( 1-r/100)^time ) = P ( 1-r/100)^time
{ For A} {For B}

216 ( 1 - r/100)^3 = 125 ( 1- 10/100)^3
Now take cube root , you will get

6 ( 1 -r/100) = 5 ( 1 - 10/100)
6 ( 1 -r/100) = 9/2
( 1 -r/100) = 3/4
r/100 = 1 / 4
r = 25 %

Hope you understood.

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