Mathematics of FinanceMCQPYQ Jun 23Question 1243 of 512
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Mr. Ram invested a total of 1,00,000\displaystyle 1,00,000 in two different banks for a fixed period. The first bank yields an interest of 9%\displaystyle 9\% p.a. and second, 11%\displaystyle 11\% per annum. If the total interest at the end of one year is 9.75%\displaystyle 9.75\% p.a., there the amount invested in these banks are respectively:

Options

A52,500,47,500\displaystyle 52,500, 47,500
B62,500,37,500\displaystyle 62,500, 37,500
C57,500,42,500\displaystyle 57,500, 42,500
D67,500,32,500\displaystyle 67,500, 32,500
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Correct Answer

Option b62,500,37,500\displaystyle 62,500, 37,500

All Options:

  • A52,500,47,500\displaystyle 52,500, 47,500
  • B62,500,37,500\displaystyle 62,500, 37,500
  • C57,500,42,500\displaystyle 57,500, 42,500
  • D67,500,32,500\displaystyle 67,500, 32,500

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Detailed Solution & Explanation

**Derivation of Invested Sums in Two Banks** Given: - Total investment = Rs. 1,00,000\displaystyle \text{Rs. }1,00,000 - Bank 1 rate (r1\displaystyle r_1) = 9%\displaystyle 9\% simple interest - Bank 2 rate (r2\displaystyle r_2) = 11%\displaystyle 11\% simple interest - Weighted average rate earned = 9.75%\displaystyle 9.75\% simple interest **Step 1: Use the allegation rule to find the ratio of investments** Ratio P1P2=r2ravgravgr1\text{Ratio } \frac{P_1}{P_2} = \frac{r_2 - r_{\text{avg}}}{r_{\text{avg}} - r_1} P1P2=119.759.759=1.250.75=53\frac{P_1}{P_2} = \frac{11 - 9.75}{9.75 - 9} = \frac{1.25}{0.75} = \frac{5}{3} **Step 2: Divide the total investment in the ratio 5:3** - Amount in Bank 1 (P1\displaystyle P_1) = 100000×58=Rs. 62,500\displaystyle 100000 \times \frac{5}{8} = \text{Rs. }62,500 - Amount in Bank 2 (P2\displaystyle P_2) = 100000×38=Rs. 37,500\displaystyle 100000 \times \frac{3}{8} = \text{Rs. }37,500 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

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