Mathematics of FinanceMCQPYQ Dec 23Question 1253 of 512
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Mr. X makes a deposit of 50,000\displaystyle 50,000 in the bank for a period 2.5\displaystyle 2.5 years. If the rate of interest is 12%\displaystyle 12\% per annum compounded half yearly, then the maturity value of the money deposited by Mr. X is: (where (1.06)5=1.3382\displaystyle (1.06)^5 = 1.3382)

Options

A66,910\displaystyle 66,910
B66,123\displaystyle 66,123
C67,925\displaystyle 67,925
D65,550\displaystyle 65,550
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Correct Answer

Option a66,910\displaystyle 66,910

All Options:

  • A66,910\displaystyle 66,910
  • B66,123\displaystyle 66,123
  • C67,925\displaystyle 67,925
  • D65,550\displaystyle 65,550

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Detailed Solution & Explanation

**Derivation of Maturity Value** Given: - Principal (P\displaystyle P) = Rs. 50,000\displaystyle \text{Rs. }50,000 - Time (t\displaystyle t) = 2.5\displaystyle 2.5 years - Rate (r\displaystyle r) = 12%\displaystyle 12\% per annum compounded half-yearly - Given: (1.06)5=1.3382\displaystyle (1.06)^5 = 1.3382 **Step 1: Calculate periodic rate (i\displaystyle i) and number of periods (n\displaystyle n)** - Periodic rate i=r2=12%2=6%=0.06\displaystyle i = \frac{r}{2} = \frac{12\%}{2} = 6\% = 0.06 per half-year. - Number of periods n=t×2=2.5×2=5\displaystyle n = t \times 2 = 2.5 \times 2 = 5 half-years. **Step 2: Calculate Maturity Value (A\displaystyle A)** A=P(1+i)nA = P(1 + i)^n A=50000(1.06)5A = 50000(1.06)^5 Using the given value (1.06)5=1.3382\displaystyle (1.06)^5 = 1.3382: A=50000×1.3382=Rs. 66,910A = 50000 \times 1.3382 = \text{Rs. }66,910 Hence, **Option A** 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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