Mathematics of FinanceMCQPYQ Jun 23Question 1250 of 512
All Questions

Jonny wants to have 2,00,000\displaystyle 2,00,000 in his saving account after three year. The rate of interest offered by bank is 8%\displaystyle 8\% per annum compounded annually. How much should he invest today to achieve his target amount?

Options

A1,47,489.10\displaystyle 1,47,489.10
B1,58,766.44\displaystyle 1,58,766.44
C1,71,035.59\displaystyle 1,71,035.59
D1,84,417.96\displaystyle 1,84,417.96
For any discrepancies in this question, email contact@cadada.in

Correct Answer

Option b1,58,766.44\displaystyle 1,58,766.44

All Options:

  • A1,47,489.10\displaystyle 1,47,489.10
  • B1,58,766.44\displaystyle 1,58,766.44
  • C1,71,035.59\displaystyle 1,71,035.59
  • D1,84,417.96\displaystyle 1,84,417.96

Ad

Detailed Solution & Explanation

**Derivation of Invested Principal** Given: - Future Value (A\displaystyle A) = Rs. 2,00,000\displaystyle \text{Rs. }2,00,000 - Time (t\displaystyle t) = 3\displaystyle 3 years - Rate of Interest (r\displaystyle r) = 8%\displaystyle 8\% per annum compounded annually **Step 1: Calculate the Present Value (P\displaystyle P)** A=P(1+r)tA = P(1 + r)^t 200000=P(1+0.08)3200000 = P(1 + 0.08)^3 200000=P(1.08)3200000 = P(1.08)^3 200000=P(1.259712)200000 = P(1.259712) P=2000001.259712Rs. 1,58,766.44P = \frac{200000}{1.259712} \approx \text{Rs. }1,58,766.44 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

Guaranteed 12-16 marks. Master your calculator! Learn the 'GT' and compound interest M+/M- tricks to solve annuity questions in 10 seconds without writing long formulas.

Related Comparison Tables

More Questions from Mathematics of Finance

Ready to Master Mathematics of Finance?

Practice all 512 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.

Start Practicing — It's Free