Mathematics of FinanceMCQPYQ May 20Question 1306 of 512
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A sum of money triples itself in 18\displaystyle 18 years under simple interest, what is the rate of interest p.a.?

Options

A9%\displaystyle 9\%
B9.09%\displaystyle 9.09\%
C11.11%\displaystyle 11.11\%
D13%\displaystyle 13\%
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Correct Answer

Option c11.11%\displaystyle 11.11\%

All Options:

  • A9%\displaystyle 9\%
  • B9.09%\displaystyle 9.09\%
  • C11.11%\displaystyle 11.11\%
  • D13%\displaystyle 13\%

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Detailed Solution & Explanation

**Derivation of Simple Interest Rate** Given: - Time (t\displaystyle t) = 18\displaystyle 18 years - Let the sum be P\displaystyle P. Amount (A\displaystyle A) = 3P\displaystyle 3P **Step 1: Calculate Simple Interest (SI\displaystyle SI)** SI=AP=3PP=2PSI = A - P = 3P - P = 2P **Step 2: Set up the Simple Interest formula** SI=P×R×t100SI = \frac{P \times R \times t}{100} 2P=P×R×181002P = \frac{P \times R \times 18}{100} 2=18R1002 = \frac{18 R}{100} 18R=20018 R = 200 R=20018=100911.11% per annumR = \frac{200}{18} = \frac{100}{9} \approx 11.11\% \text{ per annum} Hence, **Option C** 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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