Mathematics of FinanceMCQPYQ Sep 24Question 1269 of 512
All Questions

Mr. X makes a deposit of 12,000\displaystyle 12,000 in a bank where the amount doubles at compound interest in 5\displaystyle 5 years, then what will be the total amount he will have after twenty years?

Options

A1,20,000\displaystyle 1,20,000
B96,000\displaystyle 96,000
C1,24,000\displaystyle 1,24,000
D1,92,000\displaystyle 1,92,000
For any discrepancies in this question, email contact@cadada.in

Correct Answer

Option d1,92,000\displaystyle 1,92,000

All Options:

  • A1,20,000\displaystyle 1,20,000
  • B96,000\displaystyle 96,000
  • C1,24,000\displaystyle 1,24,000
  • D1,92,000\displaystyle 1,92,000

Ad

Detailed Solution & Explanation

**Derivation of Future Value** Given: - Principal (P\displaystyle P) = Rs. 12,000\displaystyle \text{Rs. }12,000 - The money doubles at compound interest every 5\displaystyle 5 years. **Step 1: Set up the doubling formula** Let t\displaystyle t be the total time and d=5\displaystyle d = 5 years be the doubling period. The future value A\displaystyle A after t\displaystyle t years is: A=P×2t/dA = P \times 2^{t/d} **Step 2: Calculate the amount after 20 years (t=20\displaystyle t = 20)** A=12000×220/5A = 12000 \times 2^{20/5} A=12000×24A = 12000 \times 2^4 A=12000×16=Rs. 1,92,000A = 12000 \times 16 = \text{Rs. }1,92,000 Hence, **Option D** 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.

Key Concepts to Understand

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