Mathematics of FinancePYQ Sept 25Question 4411 of 507
All Questions

The difference between the compound interest and the simple interest on a certain sum at 12% per annum for 2 years is ₹ 90, when the interest is compounded annually. Then the sum is ₹

Options

A6150
B6050
C6350
D6250
For any discrepancies in this question, email contact@cadada.in

Correct Answer

Option d6250

All Options:

  • A6150
  • B6050
  • C6350
  • D6250

Detailed Solution & Explanation

Let the sum of money be P\displaystyle P. Interest rate (R\displaystyle R) = 12%\displaystyle 12\% per annum Time (n\displaystyle n) = 2 years
The formula for Simple Interest (SI\displaystyle SI) for 2 years: SI=P×R100×n=P×0.12×2=0.24PSI = P \times \frac{R}{100} \times n = P \times 0.12 \times 2 = 0.24P
The formula for Compound Interest (CI\displaystyle CI) for 2 years compounded annually: CI=P(1+0.12)2P=P(1.12)2P=P(1.25441)=0.2544PCI = P(1 + 0.12)^2 - P = P(1.12)^2 - P = P(1.2544 - 1) = 0.2544P
The difference between compound interest and simple interest is given as ₹ 90: CISI=90CI - SI = 90 0.2544P0.24P=900.2544P - 0.24P = 90 0.0144P=900.0144P = 90 P=900.0144=6250 rupeesP = \frac{90}{0.0144} = 6250\text{ rupees}
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

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.

Key Concepts to Understand

More Questions from Mathematics of Finance

Ready to Master Mathematics of Finance?

Practice all 507 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.

Start Practicing — It's Free