Mathematics of FinanceMCQMTP May 19Question 1496 of 512
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Y bought Motor Bike Costing 80,000\displaystyle 80,000 by making down payment of 30,000\displaystyle 30,000 and agreeing to make annual payment for four years. How much would be each payment if the interest on unpaid amount be 14%\displaystyle 14\% compounded annually.

Options

A17160.25\displaystyle 17160.25
B17600.25\displaystyle 17600.25
C15600.25\displaystyle 15600.25
D16600.25\displaystyle 16600.25
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Correct Answer

Option a17160.25\displaystyle 17160.25

All Options:

  • A17160.25\displaystyle 17160.25
  • B17600.25\displaystyle 17600.25
  • C15600.25\displaystyle 15600.25
  • D16600.25\displaystyle 16600.25

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Detailed Solution & Explanation

The unpaid balance (PV\displaystyle PV) is: PV=80,00030,000=50,000PV = 80,000 - 30,000 = 50,000 The annual instalment P\displaystyle P is: P=PVP(4,0.14)=50,0002.913717,160.25P = \frac{PV}{P(4, 0.14)} = \frac{50,000}{2.9137} \approx 17,160.25 Hence, **Option A** 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

Guaranteed 12-16 marks. Master your calculator! Learn the 'GT' and compound interest M+/M- tricks to solve annuity questions in 10 seconds without writing long formulas.

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