Mathematics of FinanceMCQPYQ Dec 23Question 1257 of 512
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Mr. XYZ invested $60,000\displaystyle in a nationalized bank in the form of fixed deposit at the rate of $7.5\% per annum simple interest rate. He received $83,500$ after the end of the term of fixed deposit. Calculate the period for which $60,000$ was invested in fixed deposit.

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

✅ Option a — 3\displaystyle 3 years

All Options:

  • A3\displaystyle 3 years
  • B$3.5$ years
  • C4\displaystyle 4 years
  • D$4.5$ years

Detailed Solution & Explanation

**Derivation of Fixed Deposit Tenure** *Note: The question contains a typo in the amount received, stating it is 83,500. In standard CA Foundation exam problems, the received amount is 73,500, which yields a whole-number solution of 3 years.* Given: - Principal (P\displaystyle P) = Rs. 60,000\displaystyle Rs. \displaystyle \text{Rs. }60,000 - Simple Interest Rate (R\displaystyle R) = $7.5\%$ per annum - Correct Amount received (A\displaystyle A) = Rs. 73,500\displaystyle Rs. \displaystyle \text{Rs. }73,500 **Step 1: Calculate simple interest earned (SI\displaystyle SI)** SI=A−P=73500−60000=Rs. 13,500SI = A - P = 73500 - 60000 = Rs. \displaystyle \text{Rs. }13,500 **Step 2: Solve for Time (T\displaystyle T)** SI=P×R×T100SI = P×R×T100\displaystyle \frac{P \times R \times T}{100} 13500=60000×7.5×T10013500 = 60000×7.5×T100\displaystyle \frac{60000 \times 7.5 \times T}{100} 13500=600×7.5×T13500 = 600 ×\displaystyle \times 7.5 ×\displaystyle \times T 13500=4500T13500 = 4500 T T=135004500=3 yearsT = 135004500=3\displaystyle \frac{13500}{4500} = 3  years\displaystyle \text{ years} *(Using the database value of 83,500 yields T=5.22\displaystyle T = 5.22 years).* 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

Exam Strategy Tip

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