Mathematics of FinanceMCQPYQ June 22Question 1233 of 512
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In how much time a sum of amount doubles at simple interest at $12.5\%$ rate?

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

✅ Option b — 8 years

All Options:

  • A7 years
  • B8 years
  • C9 years
  • D10 years

Detailed Solution & Explanation

**Derivation of Time to Double Principal** Given: - A sum doubles itself under Simple Interest. - Simple Interest Rate (r\displaystyle r) = $12.5\%$ per annum **Step 1: Find Simple Interest (SI\displaystyle SI)** If the sum doubles, the interest earned is equal to the principal: SI=PSI = P **Step 2: Solve for Time (t\displaystyle t)** SI=P×r×t100SI = P×r×t100\displaystyle \frac{P \times r \times t}{100} P=P×12.5×t100P = P×12.5×t100\displaystyle \frac{P \times 12.5 \times t}{100} 1=12.5t1001 = 12.5t100\displaystyle \frac{12.5 t}{100} t=10012.5=8 yearst = 10012.5=8\displaystyle \frac{100}{12.5} = 8  years\displaystyle \text{ years} Hence, **Option B** 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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A certain sum of money was put at S.I. for $2.5$ years at a certain rate of S.I. p.a. Had it been put at $4\%$ higher rate, it would have fetched $500$ more. Find the sum of money.

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

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