Mathematics for FinanceMTP Oct 21Question 1341 of 512
All Questions

The compound interest earned by a money lender on 7,000\displaystyle 7,000 for 3\displaystyle 3 years at the rate of interest for 3\displaystyle 3 years are 7%\displaystyle 7\%, 8%\displaystyle 8\% and 8.5%\displaystyle 8.5\% is

Options

A1750\displaystyle 1750
B1800\displaystyle 1800
C1776\displaystyle 1776
Dnone of these
For any discrepancies in this question, email contact@cadada.in

Correct Answer

✅ Option c — 1776\displaystyle 1776

All Options:

  • A1750\displaystyle 1750
  • B1800\displaystyle 1800
  • C1776\displaystyle 1776
  • Dnone of these

Detailed Solution & Explanation

**Derivation of Compound Interest with Varying Rates** Given: - Principal (P\displaystyle P) = Rs. 7,000\displaystyle \text{Rs. }7,000 - Time (t\displaystyle t) = 3\displaystyle 3 years - Rates for successive years: r1=7%\displaystyle r_1 = 7\%, r2=8%\displaystyle r_2 = 8\%, r3=8.5%\displaystyle r_3 = 8.5\% **Step 1: Calculate the future value (A\displaystyle A)** A=P(1+r1)(1+r2)(1+r3)A = P(1 + r_1)(1 + r_2)(1 + r_3) A=7000(1+0.07)(1+0.08)(1+0.085)A = 7000(1 + 0.07)(1 + 0.08)(1 + 0.085) A=7000(1.07)(1.08)(1.085)A = 7000(1.07)(1.08)(1.085) **Step 2: Compute the product** 1.07×1.08×1.085=1.2538141.07 \times 1.08 \times 1.085 = 1.253814 A=7000×1.253814=Rs. 8,776.70A = 7000 \times 1.253814 = \text{Rs. }8,776.70 **Step 3: Calculate Compound Interest (CI\displaystyle CI)** CI=A−P=8776.70−7000=Rs. 1,776.70≈Rs. 1,776CI = A - P = 8776.70 - 7000 = \text{Rs. }1,776.70 \approx \text{Rs. }1,776 Hence, **Option C** is the correct answer.

Key Concepts to Understand

More Questions from Mathematics for Finance

Ready to Master Mathematics for Finance?

Practice all 512 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.

Start Practicing — It's Free