Gopal divides ₹25,500 between his two grandsons, 14-year-old Akshay and…

2026

Gopal divides ₹25,500 between his two grandsons, 14-year-old Akshay and 15-year-old Atul. Each grandson will receive his share only on turning 21. Until then, each share earns interest at 4% per annum, compounded annually. Their amounts on turning 21 are equal. How much money did Gopal initially give to Atul?

Answer: C. 13,000ConceptUnder annual compounding, a principal P grows to A = P(1 + r)n after n years, where r is the annual interest rate. If two investments earn the same…

  1. A.

    13,350

  2. B.

    12,250

  3. C.

    13,000

  4. D.

    12,500

Attempted by 16 students.

Show answer & explanation

Correct answer: C

Concept

Under annual compounding, a principal P grows to A = P(1 + r)n after n years, where r is the annual interest rate.

If two investments earn the same rate and mature to equal amounts, but one remains invested for one extra year, the shorter-term principal must be (1 + r) times the longer-term principal.

Application

  1. Akshay is 14, so his share grows for 7 years. Atul is 15, so his share grows for 6 years.

  2. Let Akshay’s initial share be x and Atul’s initial share be y. Equal maturity amounts give x(1.04)7 = y(1.04)6.

  3. Dividing both sides by (1.04)6 gives 1.04x = y.

  4. The initial shares total ₹25,500, so x + y = 25,500. Substituting y = 1.04x gives 2.04x = 25,500, hence x = 12,500.

  5. Therefore, y = 1.04 × 12,500 = 13,000.

Cross-check

The initial shares add to ₹25,500. Also, ₹12,500 × (1.04)7 and ₹13,000 × (1.04)6 are equal because ₹13,000 = ₹12,500 × 1.04.

Gopal initially gave Atul ₹13,000.

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