Shortcut Trick
Time difference between Rupesh and Mandar = 13 − 12 = 1 year.
Rate of interest = 8% = 2/25 → Multiplying factor = 27/25.
Since Mandar has less time, he gets a larger share. Ratio of Mandar's to Rupesh's share = 271 : 251 = 27 : 25.
Total parts = 27 + 25 = 52 parts.
Mandar's share = (27 ÷ 52) × 24700 = ₹12825.
∴ The correct answer is ₹12825.
Alternate Method
Given:
Total Money = ₹24,700
Rate of Interest = 8% compounded annually
Age of Rupesh = 12 years, Age of Mandar = 13 years
Target age for equality = 23 years
Formula Used:
Amount in CI, A = P(1 + R/100)T
Rupesh (12 yrs):
Principal R
11 Years
Amount A
Mandar (13 yrs):
Principal M
10 Years
Amount A
Amounts are EQUAL at Age 23
Calculations:
⇒ Time for Rupesh = 23 − 12 = 11 years
⇒ Time for Mandar = 23 − 13 = 10 years
⇒ Let the amount given to Rupesh be R and Mandar be M.
⇒ Amount of Rupesh = Amount of Mandar
⇒ R(1 + 8/100)11 = M(1 + 8/100)10
⇒ R(108/100)11 = M(108/100)10
⇒ M / R = (108/100)1
⇒ M / R = 27 / 25
⇒ Total ratio units = 27 + 25 = 52 units
⇒ 52 units = 24700
⇒ 1 unit = 24700 ÷ 52 = 475
⇒ Mandar's initial amount = 27 units
⇒ Mandar's initial amount = 27 × 475 = 12825
∴ The correct answer is ₹12825.
Additional Information
Distribution of Wealth with Compound Interest
When money is divided between two people such that they get equal amounts at a certain age, the person who has less time to invest must receive a larger principal.
Compound Interest Formula
Amount, A = P(1 + R/100)N, where P is principal, R is rate of interest per annum, and N is the number of years.
Ratio of Principals in CI
If two parts P1 and P2 amount to the same value in T1 and T2 years respectively, then their initial investment ratio is given by P1/P2 = (1 + R/100)T2−T1.