Mathematics of FinanceMCQMTP Dec 23 Series IIQuestion 3951 of 512
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The simple interest on 600\displaystyle 600 for 9 months is 27\displaystyle 27. Find the interest rate.

Options

A6%\displaystyle 6\%
B12%\displaystyle 12\%
C2.2%\displaystyle 2.2\%
DNone of these
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Correct Answer

Option a6%\displaystyle 6\%

All Options:

  • A6%\displaystyle 6\%
  • B12%\displaystyle 12\%
  • C2.2%\displaystyle 2.2\%
  • DNone of these

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Detailed Solution & Explanation

Given parameters: * Principal (P\displaystyle P) = Rs. 600\displaystyle \text{Rs. }600 * Time (t\displaystyle t) = 9\displaystyle 9 months = 912=0.75\displaystyle \frac{9}{12} = 0.75 years * Simple Interest (SI\displaystyle SI) = Rs. 27\displaystyle \text{Rs. }27 The formula for Simple Interest is: SI=P×r×t100SI = \frac{P \times r \times t}{100} Substituting the values: 27=600×r×0.7510027 = \frac{600 \times r \times 0.75}{100} 27=6×0.75×r27 = 6 \times 0.75 \times r 27=4.5r27 = 4.5 r Solving for r\displaystyle r: r=274.5=6% p.a.r = \frac{27}{4.5} = 6\% \text{ p.a.} The interest rate is 6%\displaystyle 6\%. 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

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If Rs. 1,000\displaystyle \text{Rs. }1,000 be invested at interest rate of 5%\displaystyle 5\% and the interest be added to the principal every 10\displaystyle 10 years, then the number in years in which it will amount to Rs. 2,000\displaystyle \text{Rs. }2,000 is:

If an amount is kept at S. I. it earns an interest of Rs. 600\displaystyle \text{Rs. }600 in first two years but when kept at compound interest it earns an interest of Rs. 660\displaystyle \text{Rs. }660 for the same period, then the rate of interest and principal amount respectively are:

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