Mathematics for FinanceMTP Jun 23 Series IQuestion 1377 of 512
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80,000\displaystyle 80,000 is invested to earn a monthly interest of 1,200\displaystyle 1,200 at the rate of ______ p.a. SI

Options

A12%\displaystyle 12\%
B18%\displaystyle 18\%
C16%\displaystyle 16\%
D20%\displaystyle 20\%
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Correct Answer

✅ Option b — 18%\displaystyle 18\%

All Options:

  • A12%\displaystyle 12\%
  • B18%\displaystyle 18\%
  • C16%\displaystyle 16\%
  • D20%\displaystyle 20\%

Detailed Solution & Explanation

**Derivation of Simple Interest Rate** Given: - Principal (P\displaystyle P) = Rs. 80,000\displaystyle \text{Rs. }80,000 - Monthly Interest = Rs. 1,200\displaystyle \text{Rs. }1,200 - Time (T\displaystyle T) = 1\displaystyle 1 month = 112\displaystyle \frac{1}{12} year **Step 1: Set up the Simple Interest formula** SI=P×R×T100SI = \frac{P \times R \times T}{100} 1200=80000×R×1121001200 = \frac{80000 \times R \times \frac{1}{12}}{100} 1200=20003R1200 = \frac{2000}{3} R **Step 2: Solve for R\displaystyle R** R=1200×32000=18% per annumR = \frac{1200 \times 3}{2000} = 18\% \text{ per annum} *(Note: The database lists Option D (20%\displaystyle 20\%) as correct, which is a typo in the key. The mathematically correct rate is 18%, which is Option B.)* Hence, **Option B** is the correct answer.

More Questions from Mathematics for Finance

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Rs.1,25,000\displaystyle 1,25,000 is borrowed at compound interest at the rate of 2%\displaystyle 2\% for the 1st year, 3%\displaystyle 3\% for the second year and 4%\displaystyle 4\% for the 3rd year. Find the amount to be paid after 3 years.

If Rs. 1,000\displaystyle \text{Rs. }1,000 be invested at interest rate of 5%\displaystyle 5\% and the interest be added to the principal every 10\displaystyle 10 years, then the number in years in which it will amount to Rs. 2,000\displaystyle \text{Rs. }2,000 is:

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