Question

You tell your mom that you want
₹
700
₹700₹, 700 as pocket money every month. She can deposit some money in the bank such that the interest she gets will be equal to the money you need. Her bank offers her interest of
7
%
7%7, percent per annum.
How much money should she deposit in the bank?

Answer 1

Answer: your mom must deposit ₹752.68 each month if you want to retire  ₹700.

Step-by-step explanation:

You want ₹700 per month.

The interest rate is equal to 7%, this means that the amount your mam puts in the bank, will be reduced by a 7%.

So each month your mom will put X in the bank, we must have that X minus the 7% of X is equal to ₹700, this can be written as:

X - X*0.07 = 700

X*0.93 = 700

X = 700/0.93 = 752.69

So your mom must deposit ₹752.68 each month if you want to retire  ₹700.