Mathematics of FinanceMCQMTP May 19, ICAI SMQuestion 6643 of 108

A machine can be purchased for $50,000$. Machine will be contributing $12,000$ per year for the next five years. Assuming borrowing cost is $10\%$ per annum. Determine whether machine should be purchased or not

Select Your Answer (Keyboard: A, B, C, D)

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Correct Answer

✅ Option A — Should be purchased

All Options:

AShould be purchased ✓
BShould not be purchased
CCan't say about purchase
DNone of the above

Detailed Solution & Explanation

MTP May 19, ICAI SM

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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