Mathematics of FinanceMCQPYQ Nov 19Question 1299 of 512
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Certain sum of money borrowed at simple interest amount to Rs.2688\displaystyle 2688 in three years and to 2784\displaystyle 2784 in four years at the rate p.a. equal to.

Options

A7%\displaystyle 7\%
B6%\displaystyle 6\%
C8%\displaystyle 8\%
D4%\displaystyle 4\%
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Correct Answer

Option d4%\displaystyle 4\%

All Options:

  • A7%\displaystyle 7\%
  • B6%\displaystyle 6\%
  • C8%\displaystyle 8\%
  • D4%\displaystyle 4\%

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Detailed Solution & Explanation

**Derivation of Simple Interest Rate** Given: - Amount in 3\displaystyle 3 years (A3\displaystyle A_3) = Rs. 2,688\displaystyle \text{Rs. }2,688 - Amount in 4\displaystyle 4 years (A4\displaystyle A_4) = Rs. 2,784\displaystyle \text{Rs. }2,784 **Step 1: Find the Simple Interest earned in 1 year (SI1\displaystyle SI_1)** Since simple interest is constant every year: SI1=A4A3=27842688=Rs. 96SI_1 = A_4 - A_3 = 2784 - 2688 = \text{Rs. }96 **Step 2: Solve for the Principal (P\displaystyle P)** P=A3(3×SI1)P = A_3 - (3 \times SI_1) P=2688(3×96)=2688288=Rs. 2,400P = 2688 - (3 \times 96) = 2688 - 288 = \text{Rs. }2,400 **Step 3: Calculate the interest rate (R\displaystyle R)** SI1=P×R×1100SI_1 = \frac{P \times R \times 1}{100} 96=2400×R×110096 = \frac{2400 \times R \times 1}{100} 96=24R    R=9624=4% per annum96 = 24 R \implies R = \frac{96}{24} = 4\% \text{ per annum} 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.

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