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Simple Interest Investment Mix

CMAT 2024 · Quantitative Techniques & Data Interpretation · Easy · Simple Interest

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Ramesh invests ₹1,200 at 5 % simple interest. How much additional money must he invest at 8 % simple interest so that his total annual income will be equal to 6 % of his total investment during this year ?

  1. A.

    ₹ 500

  2. B.

    ₹ 600

  3. C.

    ₹ 1,200

  4. D.

    ₹ 1,500

Answer

B

Explanation

Let additional investment be AA. Income from ₹1200 at 5% = 1200×0.05=₹601200 \times 0.05 = ₹60. Income from AA at 8% = 0.08A0.08A. Total income = 60+0.08A=0.06(1200+A)60 + 0.08A = 0.06(1200 + A). 60+0.08A=72+0.06A  ⟹  0.02A=12  ⟹  A=60060 + 0.08A = 72 + 0.06A \implies 0.02A = 12 \implies A = 600.

Hence, Option B is correct.

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