Mathematics of FinanceMCQPYQ June 24Question 1258 of 512
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An amount $4,500\displaystyle becomes $7,200 in 2\displaystyle 2 years at simple interest rate of:

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

✅ Option c — $30\%$

All Options:

  • A$15\%$
  • B$20\%$
  • C$30\%$
  • D$40\%$

Detailed Solution & Explanation

**Derivation of Simple Interest Rate** Given: - Principal (P\displaystyle P) = Rs. 4,500\displaystyle Rs. \displaystyle \text{Rs. }4,500 - Amount (A\displaystyle A) = Rs. 7,200\displaystyle Rs. \displaystyle \text{Rs. }7,200 - Time (T\displaystyle T) = 2\displaystyle 2 years **Step 1: Calculate the Simple Interest earned (SI\displaystyle SI)** SI=A−P=7200−4500=Rs. 2,700SI = A - P = 7200 - 4500 = Rs. \displaystyle \text{Rs. }2,700 **Step 2: Solve for Rate (R\displaystyle R)** SI=P×R×T100SI = P×R×T100\displaystyle \frac{P \times R \times T}{100} 2700=4500×R×21002700 = 4500×R×2100\displaystyle \frac{4500 \times R \times 2}{100} 2700=90R2700 = 90 R R=270090=30% per annumR = 270090=30\displaystyle \frac{2700}{90} = 30\%  per annum\displaystyle \text{ per annum} Hence, **Option C** 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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