Mathematics of FinanceMCQPYQ June 19Question 1190 of 512
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A sum of money amount to Rs. 6,200\displaystyle \text{Rs. }6,200 in 2\displaystyle 2 years and Rs. 7,400\displaystyle \text{Rs. }7,400 in 3\displaystyle 3 years as per S.I. then the principal is

Options

ARs. 3,000\displaystyle \text{Rs. }3,000
BRs. 3,500\displaystyle \text{Rs. }3,500
CRs. 3,800\displaystyle \text{Rs. }3,800
DNone of these
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Correct Answer

Option cRs. 3,800\displaystyle \text{Rs. }3,800

All Options:

  • ARs. 3,000\displaystyle \text{Rs. }3,000
  • BRs. 3,500\displaystyle \text{Rs. }3,500
  • CRs. 3,800\displaystyle \text{Rs. }3,800
  • DNone of these

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Detailed Solution & Explanation

**Derivation of Principal under Simple Interest** Given: - Amount after 2\displaystyle 2 years (A2\displaystyle A_2) = Rs. 6,200\displaystyle \text{Rs. }6,200 - Amount after 3\displaystyle 3 years (A3\displaystyle A_3) = Rs. 7,400\displaystyle \text{Rs. }7,400 **Step 1: Find Simple Interest per year (I\displaystyle I)** Since Simple Interest is constant over time: Interest for 1 year (32)=A3A2=74006200=Rs. 1,200\text{Interest for 1 year } (3 - 2) = A_3 - A_2 = 7400 - 6200 = \text{Rs. }1,200 **Step 2: Find the Principal (P\displaystyle P)** Using the amount equation for 2\displaystyle 2 years: A2=P+2IA_2 = P + 2I 6200=P+2(1200)6200 = P + 2(1200) 6200=P+24006200 = P + 2400 P=62002400=Rs. 3,800P = 6200 - 2400 = \text{Rs. }3,800 Hence, **Option C** is the correct answer.

About This Chapter: Mathematics of Finance

Paper

Paper 3: Quantitative Aptitude

Weightage

12-16 Marks

Key Topics

Simple & Compound Interest, Annuity, Perpetuity

The most important mathematical chapter in the entire syllabus. It covers Simple Interest (SI), Compound Interest (CI), Nominal vs Effective rates, Present and Future Value, Annuities (Ordinary and Due), Sinking Funds, and Perpetuities. The concepts learned here are applied heavily in CA Intermediate and Final.

View Official ICAI Syllabus

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