Mathematics of FinanceMCQMTP Jun 23 Series IIQuestion 1383 of 512
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A certain sum of money becomes double at 5%\displaystyle 5\% rate of S.I. p.a. in a certain time, the time in years is

Options

A10\displaystyle 10 years
B20\displaystyle 20 years
C25\displaystyle 25 years
DNone of these
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Correct Answer

Option b20\displaystyle 20 years

All Options:

  • A10\displaystyle 10 years
  • B20\displaystyle 20 years
  • C25\displaystyle 25 years
  • DNone of these

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Detailed Solution & Explanation

**Derivation of Time to Double Sum** Given: - Rate of Simple Interest (R\displaystyle R) = 5%\displaystyle 5\% per annum - Let the sum be P\displaystyle P. Amount (A\displaystyle A) = 2P\displaystyle 2P **Step 1: Calculate Simple Interest (SI\displaystyle SI)** SI=AP=2PP=PSI = A - P = 2P - P = P **Step 2: Set up the Simple Interest formula** SI=P×R×t100SI = \frac{P \times R \times t}{100} P=P×5×t100P = \frac{P \times 5 \times t}{100} 1=5t1001 = \frac{5 t}{100} 5t=100    t=20 years5 t = 100 \implies t = 20 \text{ years} 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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