Target-Equality under CI — Split ₹ 3903 so that A after 7 years equals B after 9 years (4% p.a.): Divide ₹ 3903 between A and B such that A's amount after 7 years at 4% compound equals B's amount after 9 years at the same rate. Find the two shares.

Difficulty: Medium

Correct Answer: Rs. 2028, Rs. 1875

Explanation:


Introduction / Context:
When two parts of a sum will be left to grow for different durations at the same compound rate, equalizing their future amounts defines a proportional split today. This is a typical present-value balancing problem under compound interest.



Given Data / Assumptions:

  • Total sum S = ₹ 3903
  • Annual rate = 4% = 0.04
  • A grows for 7 years; B grows for 9 years
  • Condition: A's future amount = B's future amount


Concept / Approach:
Let A's share be x; B's share is 3903 − x. Equality at maturity: x*(1.04)^7 = (3903 − x)*(1.04)^9. Divide both sides by (1.04)^7 to solve for x.



Step-by-Step Solution:

x = (3903 − x)*(1.04)^2 = (3903 − x)*1.0816.x + 1.0816x = 3903 * 1.0816 ⇒ 2.0816x = 4221.4848.x = 4221.4848 / 2.0816 = ₹ 2028 ⇒ B = 3903 − 2028 = ₹ 1875.


Verification / Alternative check:

Forward check: 2028*(1.04)^7 equals 1875*(1.04)^9 (same value).


Why Other Options Are Wrong:

  • All other splits do not satisfy x*(1.04)^7 = (3903 − x)*(1.04)^9.


Common Pitfalls:

  • Forgetting to divide out common growth before solving; mixing SI and CI.


Final Answer:
Rs. 2028 for A and Rs. 1875 for B.

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