Mathematics of FinanceMCQMTP Dec 23 Series IQuestion 1390 of 512
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The sum required to earn a monthly interest of Rs.1200\displaystyle 1200 at 18%\displaystyle 18\% P.a Simple Interest is -

Options

ARs.80,000\displaystyle 80,000
BRs.90,000\displaystyle 90,000
CRs.80,000\displaystyle 80,000
DNone of these
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Correct Answer

Option cRs.80,000\displaystyle 80,000

All Options:

  • ARs.80,000\displaystyle 80,000
  • BRs.90,000\displaystyle 90,000
  • CRs.80,000\displaystyle 80,000
  • DNone of these

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Detailed Solution & Explanation

**Derivation of Principal Amount** Given: - Monthly simple interest = Rs. 1,200\displaystyle \text{Rs. }1,200 - Rate of Interest (R\displaystyle R) = 18%\displaystyle 18\% per annum - 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=P×18×1121001200 = \frac{P \times 18 \times \frac{1}{12}}{100} 1200=1.5P1001200 = \frac{1.5 P}{100} 1200=0.015P1200 = 0.015 P **Step 2: Solve for P\displaystyle P** P=12000.015=Rs. 80,000P = \frac{1200}{0.015} = \text{Rs. }80,000 *(Note: Both Option A and Option C are listed as Rs. 80,000. Option C is marked correct in the key.)* 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

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