Rayan invests a sum at 6% p.a. and 7% p.a. simple interest. What is the ratio of his investments if the returns are equal?
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Answer: D. 7 : 6
Explanation
Equating the simple interest returns means principal one times six percent equals principal two times seven percent. Setting up the proportion between the two investment capitals gives an inverse ratio relationship. Solving the equation yields an investment ratio of seven to six for the respective capital sums. Simple interest equals principal multiplied by rate and time duration for each investment. Equal returns from different interest rates require balancing principal amounts inversely to their rates. Ratio equations allow financial portfolios to be split effectively to match specified return targets.
Investment portfolio management involves balancing assets across different interest rate tiers to equalize returns. Financial planning requires calculating proportional capital distributions for fixed income products. Banking comparisons use interest equations to evaluate yield parity among competing financial instruments. Option A suggests an incorrect investment ratio that fails to equalize the simple interest returns. Option B reverses the proportional balance required between the two interest rate percentages. Option C represents an arbitrary fraction that does not satisfy the interest equality equation.
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- Mathematics
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- Mathematics
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