Mathematics of FinanceMCQMTP Mar 21Question 1313 of 512
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SI=0.125P\displaystyle SI = 0.125 P at 10%\displaystyle 10\% p.a find the time

Options

A1.25\displaystyle 1.25 years
B25\displaystyle 25 years
C0.25\displaystyle 0.25 years
DNone of these
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Correct Answer

Option a1.25\displaystyle 1.25 years

All Options:

  • A1.25\displaystyle 1.25 years
  • B25\displaystyle 25 years
  • C0.25\displaystyle 0.25 years
  • DNone of these

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Detailed Solution & Explanation

**Derivation of Simple Interest Time** Given: - Simple Interest (SI\displaystyle SI) = 0.125P\displaystyle 0.125 P - Rate of Interest (R\displaystyle R) = 10%\displaystyle 10\% per annum **Step 1: Set up the Simple Interest formula** SI=P×R×t100SI = \frac{P \times R \times t}{100} 0.125P=P×10×t1000.125 P = \frac{P \times 10 \times t}{100} 0.125=0.10t0.125 = 0.10 t **Step 2: Solve for t\displaystyle t** t=0.1250.10=1.25 yearst = \frac{0.125}{0.10} = 1.25 \text{ years} 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

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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