Mathematics of FinanceMCQPYQ Nov 18Question 1283 of 512
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A man deposited Rs. 8,000\displaystyle \text{Rs. }8,000 in a bank for 3\displaystyle 3 years at 5%\displaystyle 5\% per annum compound interest, after 3\displaystyle 3 years he will get

Options

ARs. 8,800\displaystyle \text{Rs. }8,800
BRs. 9,261\displaystyle \text{Rs. }9,261
CRs. 9,200\displaystyle \text{Rs. }9,200
DRs. 9,000\displaystyle \text{Rs. }9,000
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Correct Answer

Option bRs. 9,261\displaystyle \text{Rs. }9,261

All Options:

  • ARs. 8,800\displaystyle \text{Rs. }8,800
  • BRs. 9,261\displaystyle \text{Rs. }9,261
  • CRs. 9,200\displaystyle \text{Rs. }9,200
  • DRs. 9,000\displaystyle \text{Rs. }9,000

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Detailed Solution & Explanation

**Derivation of Compound Interest Amount** Given: - Principal (P\displaystyle P) = Rs. 8,000\displaystyle \text{Rs. }8,000 - Rate of Interest (r\displaystyle r) = 5%\displaystyle 5\% per annum compounded annually - Time (t\displaystyle t) = 3\displaystyle 3 years **Step 1: Calculate the future value (A\displaystyle A)** A=P(1+r)tA = P(1 + r)^t A=8000(1+0.05)3A = 8000(1 + 0.05)^3 A=8000(1.05)3A = 8000(1.05)^3 **Step 2: Compute the power** (1.05)3=1.05×1.05×1.05=1.157625(1.05)^3 = 1.05 \times 1.05 \times 1.05 = 1.157625 **Step 3: Multiply by the Principal** A=8000×1.157625=Rs. 9,261A = 8000 \times 1.157625 = \text{Rs. }9,261 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.

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