Mathematics of FinanceMCQPYQ June 22Question 1233 of 512
All Questions

In how much time a sum of amount doubles at simple interest at 12.5%\displaystyle 12.5\% rate?

Options

A7 years
B8 years
C9 years
D10 years
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Correct Answer

Option b8 years

All Options:

  • A7 years
  • B8 years
  • C9 years
  • D10 years

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Detailed Solution & Explanation

**Derivation of Time to Double Principal** Given: - A sum doubles itself under Simple Interest. - Simple Interest Rate (r\displaystyle r) = 12.5%\displaystyle 12.5\% per annum **Step 1: Find Simple Interest (SI\displaystyle SI)** If the sum doubles, the interest earned is equal to the principal: SI=PSI = P **Step 2: Solve for Time (t\displaystyle t)** SI=P×r×t100SI = \frac{P \times r \times t}{100} P=P×12.5×t100P = \frac{P \times 12.5 \times t}{100} 1=12.5t1001 = \frac{12.5 t}{100} t=10012.5=8 yearst = \frac{100}{12.5} = 8 \text{ years} Hence, **Option B** 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

Exam Strategy Tip

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