Question

A house wife invest RS 5000 at 5.5% her husband wishes to invest enough money to have 8% interest so that their total interest will amount to RS 1000 in a year the amount invested by husband is

Answer 1

Answer:

The amount invested by husband is=$7,500

Explanation:

Step 1: Determine total amount that will yield a total interest of RS 1,000

Use the expression below;

T=W.I+H.I

where;

T=total interest amount

W.I=wife's interest amount

H.I=husband's interest amount

In our case;

T=RS 1,000

W.I=PRT

where;

P=principal amount=RS 5,000

R=annual interest rate=5.5%=5.5/100=0.055

T=1

W.I=5,000×0.055×1=$275

H.I=unknown

replacing;

1,000=275+H.I

H.I=1,000-275=$725

Husband's interest amount=$725

Step 2: Determine total principal combining for the husband and the wife

Pt=Pw+Ph

where;

Pt=total principal

Pw=wife principal

Ph=husband principal

In our case;

Pt=1,000/(0.08×1)=$12,500

Pw=5,000

Ph=unknown

replacing;

12,500=5,000+Ph

Ph=12,500-5,000=7,500

Husband principal=$7,500

Step 2: Determine husbands interest rate

Husband interest amount=Principal×interest rate×time

where;

Husband interest amount=725

Principal=7,500

interest rate=unknown=i%

time=1

replacing;

725=7,500×0.01 i×1

i=9.7%

The husbands individual interest rate=9.7%