Mathematics of FinanceMCQMTP June 24 Series IIQuestion 1417 of 512
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In what time will a sum of money double its y at 6.25%\displaystyle 6.25\% p.a. simple interest?

Options

A5 years
B8 years
C12 years
D16 years
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Correct Answer

Option d16 years

All Options:

  • A5 years
  • B8 years
  • C12 years
  • D16 years

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Detailed Solution & Explanation

Let the principal be P\displaystyle P. The rate of simple interest is r=6.25%\displaystyle r = 6.25\% p.a. We want to find the time t\displaystyle t in years for the sum to double itself (meaning the simple interest earned equals the principal P\displaystyle P): SI=PSI = P The formula for Simple Interest is: SI=P×r×t100SI = \frac{P \times r \times t}{100} Substituting the values: P=P×6.25×t100P = \frac{P \times 6.25 \times t}{100} 1=0.0625×t1 = 0.0625 \times t Solving for t\displaystyle t: t=10.0625=16 yearst = \frac{1}{0.0625} = 16 \text{ years} Thus, the sum will double in 16\displaystyle 16 years. 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

Exam Strategy Tip

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