Read Mode
Simple Interest (Present Value/Will)
A father left a will of Rs.35 lakhs between his two daughters aged 8.5 and 16 such that they may get equal amounts when each of them reaches the age of 21 years. The original amount of Rs.35 lakhs has been instructed to be invested at 10% p.a. simple interest. How much did the elder daughter get at the time of the will?
Explanation and memory cue
The elder daughter is 16 and will receive her amount at 21, so her money will earn interest for 5 years. The younger daughter is 8.5 and will receive her amount at 21, so her money will earn interest for 12.5 years. Let the elder daughter's principal be x and the younger daughter's principal be (35 - x) lakhs. Both amounts will be equal at 21 years: x + x*10%*5 = (35 - x) + (35 - x)*10%*12.5. Solving gives x = 15 lakhs.