Mathematics of FinanceMCQMTP 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 b18%\displaystyle 18\%

All Options:

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

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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.

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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