Mathematics of FinanceMCQPYQ Dec 23Question 1252 of 512
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Manoj invests 12,000\displaystyle 12,000 at 6%\displaystyle 6\% per annum simple interest to obtain a total amount of 14,880\displaystyle 14,880. What is the time for which the amount was invested?

Options

A3 years
B4 years
C2 years
D5 years
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Correct Answer

Option b4 years

All Options:

  • A3 years
  • B4 years
  • C2 years
  • D5 years

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Detailed Solution & Explanation

**Derivation of Investment Period** Given: - Principal (P\displaystyle P) = Rs. 12,000\displaystyle \text{Rs. }12,000 - Simple Interest Rate (R\displaystyle R) = 6%\displaystyle 6\% per annum - Future Value (A\displaystyle A) = Rs. 14,880\displaystyle \text{Rs. }14,880 **Step 1: Calculate simple interest earned (SI\displaystyle SI)** SI=AP=1488012000=Rs. 2,880SI = A - P = 14880 - 12000 = \text{Rs. }2,880 **Step 2: Solve for Time (T\displaystyle T)** SI=P×R×T100SI = \frac{P \times R \times T}{100} 2880=12000×6×T1002880 = \frac{12000 \times 6 \times T}{100} 2880=720T2880 = 720 T T=2880720=4 yearsT = \frac{2880}{720} = 4 \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

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