Mathematics of FinanceMCQMTP Dec 23 Series IQuestion 1391 of 512
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Sachin deposited Rs.1,00,000\displaystyle 1,00,000 in his bank for 2\displaystyle 2 years at simple interest of 6%\displaystyle 6\%. How much interest would he earns? How much final value of deposit

Options

ARs.6,000\displaystyle 6,000, Rs.1,06,000\displaystyle 1,06,000
BRs.10,000\displaystyle 10,000, Rs.1,15,000\displaystyle 1,15,000
CRs.11,600\displaystyle 11,600, Rs.1,11,600\displaystyle 1,11,600
DRs.1200\displaystyle 1200, Rs.1,12,000\displaystyle 1,12,000
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Correct Answer

Option dRs.1200\displaystyle 1200, Rs.1,12,000\displaystyle 1,12,000

All Options:

  • ARs.6,000\displaystyle 6,000, Rs.1,06,000\displaystyle 1,06,000
  • BRs.10,000\displaystyle 10,000, Rs.1,15,000\displaystyle 1,15,000
  • CRs.11,600\displaystyle 11,600, Rs.1,11,600\displaystyle 1,11,600
  • DRs.1200\displaystyle 1200, Rs.1,12,000\displaystyle 1,12,000

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Detailed Solution & Explanation

**Derivation of Simple Interest and Future Value** Given: - Principal (P\displaystyle P) = Rs. 1,00,000\displaystyle \text{Rs. }1,00,000 - Rate (R\displaystyle R) = 6%\displaystyle 6\% per annum simple interest - Time (t\displaystyle t) = 2\displaystyle 2 years **Step 1: Calculate Simple Interest (SI\displaystyle SI)** SI=P×R×t100SI = \frac{P \times R \times t}{100} SI=100000×6×2100=Rs. 12,000SI = \frac{100000 \times 6 \times 2}{100} = \text{Rs. }12,000 **Step 2: Calculate the Final Amount (A\displaystyle A)** A=P+SI=100000+12000=Rs. 1,12,000A = P + SI = 100000 + 12000 = \text{Rs. }1,12,000 *(Note: Option D contains a typo in the interest part, listing Rs. 1,200 instead of Rs. 12,000. However, the final value of Rs. 1,12,000 uniquely identifies Option D as the correct choice.)* Hence, **Option D** 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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