Mathematics of FinanceMCQPYQ Dec 21Question 1228 of 512
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Rahul invested 70,000\displaystyle 70,000 in a bank at the rate of 6.5%\displaystyle 6.5\% p.a. simple interest rate. He received 85,925\displaystyle 85,925 after the end of term. Find out the period for which sum was invested by Rahul.

Options

A2\displaystyle 2 years
B3\displaystyle 3 years
C3.5\displaystyle 3.5 years
D2.5\displaystyle 2.5 years
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Correct Answer

Option c3.5\displaystyle 3.5 years

All Options:

  • A2\displaystyle 2 years
  • B3\displaystyle 3 years
  • C3.5\displaystyle 3.5 years
  • D2.5\displaystyle 2.5 years

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Detailed Solution & Explanation

**Derivation of Investment Period** Given: - Principal (P\displaystyle P) = Rs. 70,000\displaystyle \text{Rs. }70,000 - Simple Interest Rate (R\displaystyle R) = 6.5%\displaystyle 6.5\% per annum - Future Value (A\displaystyle A) = Rs. 85,925\displaystyle \text{Rs. }85,925 **Step 1: Calculate the Simple Interest earned (SI\displaystyle SI)** SI=AP=8592570000=Rs. 15,925SI = A - P = 85925 - 70000 = \text{Rs. }15,925 **Step 2: Solve for Time (T\displaystyle T)** SI=P×R×T100SI = \frac{P \times R \times T}{100} 15925=70000×6.5×T10015925 = \frac{70000 \times 6.5 \times T}{100} 15925=700×6.5×T15925 = 700 \times 6.5 \times T 15925=4550T15925 = 4550 T T=159254550=3.5 yearsT = \frac{15925}{4550} = 3.5 \text{ years} 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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