Mathematics of FinanceMCQPYQ Nov 19Question 1293 of 512
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If a person invests 3,000\displaystyle 3,000 in a three years' investment that pays 12%\displaystyle 12\% per annum. Calculate the future value of the investment.

Options

A4214.78\displaystyle 4214.78
B4124.78\displaystyle 4124.78
C4324.48\displaystyle 4324.48
D4236.48\displaystyle 4236.48
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Correct Answer

Option a4214.78\displaystyle 4214.78

All Options:

  • A4214.78\displaystyle 4214.78
  • B4124.78\displaystyle 4124.78
  • C4324.48\displaystyle 4324.48
  • D4236.48\displaystyle 4236.48

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Detailed Solution & Explanation

**Derivation of Future Value** Given: - Principal (P\displaystyle P) = Rs. 3,000\displaystyle \text{Rs. }3,000 - Rate of Interest (r\displaystyle r) = 12%\displaystyle 12\% per annum - 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=3000(1+0.12)3A = 3000(1 + 0.12)^3 A=3000(1.12)3A = 3000(1.12)^3 A=3000×1.404928=Rs. 4,214.784Rs. 4,214.78A = 3000 \times 1.404928 = \text{Rs. }4,214.784 \approx \text{Rs. }4,214.78 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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