Mathematics of FinanceMCQMTP June 22Question 1358 of 512
All Questions

In how many years will a sum of money becomes four times at 12%\displaystyle 12\% p.a. simple interest?

Options

A18\displaystyle 18 years
B21\displaystyle 21 years
C25\displaystyle 25 years
D16\displaystyle 16 years
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Correct Answer

Option c25\displaystyle 25 years

All Options:

  • A18\displaystyle 18 years
  • B21\displaystyle 21 years
  • C25\displaystyle 25 years
  • D16\displaystyle 16 years

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Detailed Solution & Explanation

**Derivation of Time to Quadruple Principal** Given: - Rate (R\displaystyle R) = 12%\displaystyle 12\% per annum simple interest - Let the sum be P\displaystyle P. Amount (A\displaystyle A) = 4P\displaystyle 4P **Step 1: Calculate Simple Interest (SI\displaystyle SI)** SI=AP=4PP=3PSI = A - P = 4P - P = 3P **Step 2: Set up the Simple Interest formula** SI=P×R×t100SI = \frac{P \times R \times t}{100} 3P=P×12×t1003P = \frac{P \times 12 \times t}{100} 3=0.12t3 = 0.12 t t=30.12=25 yearst = \frac{3}{0.12} = 25 \text{ years} *(Note: The database lists Option D (16\displaystyle 16 years) as correct, which is a textbook discrepancy. The mathematically correct period is 25 years, which is Option C.)* 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

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