Mathematics for FinanceMTP Mar 22Question 1345 of 512
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How much time would the SI on a certain sum be 0.125\displaystyle 0.125 times the principal at 10%\displaystyle 10\% p.a.

Options

A1.25\displaystyle 1.25 years
B1.75\displaystyle 1.75 years
C2.25\displaystyle 2.25 years
D2.5\displaystyle 2.5 years
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Correct Answer

✅ Option a — 1.25\displaystyle 1.25 years

All Options:

  • A1.25\displaystyle 1.25 years
  • B1.75\displaystyle 1.75 years
  • C2.25\displaystyle 2.25 years
  • D2.5\displaystyle 2.5 years

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.

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