Question
'U' spends 25% of his monthly income on food, 30% on
rent, and 15% of the remaining amount on insurance. He saves the rest in a savings plan that gives simple interest at a rate of 11% per annum. Find the amount 'U' will get at the end of the year if his spending on insurance is Rs. 1000 per month.Solution
Let monthly income = Rs. 100c Spending on food = 100c Γ 0.25 = Rs. 25c Spending on rent = 100c Γ 0.3 = Rs. 30c Spending on insurance = (100c β 25c β 30c) Γ 0.15 = Rs. 6.75c Savings = 100c β 25c β 30c β 6.75c = Rs. 38.25c Now, 6.75c = 1000 Or, 38.25c = 5666.67 Total interest paid by the savings plan: = P Γ r Γ t = 5666.67 Γ 11 Γ 1/100 = Rs. 623.33 Amount = 5666.67 + 623.33 = Rs.6290
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