Mathematics of FinanceMCQMTP Dec 23 Series IQuestion 3946 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

Given parameters: * Principal (P\displaystyle P) = Rs. 1,00,000\displaystyle \text{Rs. }1,00,000 * Time (t\displaystyle t) = 2\displaystyle 2 years * Rate of simple interest (r\displaystyle r) = 6%\displaystyle 6\% p.a. The formula for Simple Interest is: SI=P×r×t100SI = \frac{P \times r \times t}{100} Substituting the values: SI=1,00,000×6×2100=12,000SI = \frac{1,00,000 \times 6 \times 2}{100} = 12,000 The final value (Amount, A\displaystyle A) is given by: A=P+SI=1,00,000+12,000=1,12,000A = P + SI = 1,00,000 + 12,000 = 1,12,000 So, the interest earned is Rs. 12,000\displaystyle \text{Rs. }12,000 and the final value is Rs. 1,12,000\displaystyle \text{Rs. }1,12,000. Note that Option D contains a typo where the interest is listed as "Rs. 1200" instead of "Rs. 12,000", but it represents the intended answer of Rs. 12,000\displaystyle \text{Rs. }12,000 interest and Rs. 1,12,000\displaystyle \text{Rs. }1,12,000 amount. 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.

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