Mathematics of FinanceMCQPYQ Nov 18Question 1279 of 512
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What principal will amount to 370\displaystyle 370 in 6\displaystyle 6 years at 8%\displaystyle 8\% p.a. at simple interest

Options

A210\displaystyle 210
B250\displaystyle 250
C310\displaystyle 310
D310\displaystyle 310
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Correct Answer

Option b250\displaystyle 250

All Options:

  • A210\displaystyle 210
  • B250\displaystyle 250
  • C310\displaystyle 310
  • D310\displaystyle 310

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Detailed Solution & Explanation

**Derivation of Principal Amount** Given: - Future Value under simple interest (A\displaystyle A) = Rs. 370\displaystyle \text{Rs. }370 - Time (t\displaystyle t) = 6\displaystyle 6 years - Rate (r\displaystyle r) = 8%\displaystyle 8\% per annum **Step 1: Set up the Simple Interest Amount equation** A=P(1+r×t100)A = P\left(1 + \frac{r \times t}{100}\right) 370=P(1+8×6100)370 = P\left(1 + \frac{8 \times 6}{100}\right) 370=P(1+0.48)370 = P(1 + 0.48) 370=1.48P370 = 1.48 P **Step 2: Solve for P\displaystyle P** P=3701.48=Rs. 250P = \frac{370}{1.48} = \text{Rs. }250 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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