Mathematics of FinanceMCQPYQ May 19 Series IIQuestion 1287 of 512
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10,000\displaystyle 10,000 is invested at annual rate of interest of 10%\displaystyle 10\% p.a. The amount after two years at annual compounding is

Options

A12100\displaystyle 12100
B12100\displaystyle 12100
C12110\displaystyle 12110
DNone of these
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Correct Answer

Option a12100\displaystyle 12100

All Options:

  • A12100\displaystyle 12100
  • B12100\displaystyle 12100
  • C12110\displaystyle 12110
  • DNone of these

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Detailed Solution & Explanation

**Derivation of Accumulated Amount** Given: - Principal (P\displaystyle P) = Rs. 10,000\displaystyle \text{Rs. }10,000 - Rate (r\displaystyle r) = 10%\displaystyle 10\% per annum compounded annually - Time (t\displaystyle t) = 2\displaystyle 2 years **Step 1: Calculate the Amount (A\displaystyle A)** A=P(1+r)tA = P(1 + r)^t A=10000(1+0.10)2A = 10000(1 + 0.10)^2 A=10000(1.10)2A = 10000(1.10)^2 A=10000×1.21=Rs. 12,100A = 10000 \times 1.21 = \text{Rs. }12,100 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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