Mathematics of FinanceMCQMTP Nov 18Question 1272 of 512
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A lent $6000$ to B for $2$ years and $1500$ to C for 4\displaystyle 4 years and received total interest of $900$ from both. The rate of interest when simple interest method calculated.

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

✅ Option a — 5%\displaystyle 5\%

All Options:

  • A5%\displaystyle 5\%
  • B6%\displaystyle 6\%
  • C$7.5\%$
  • D9%\displaystyle 9\%

Detailed Solution & Explanation

**Derivation of Simple Interest Rate** Given: - Sum 1 lent to B (P1\displaystyle P_1) = Rs. 6,000\displaystyle Rs. \displaystyle \text{Rs. }6,000 for t1=2\displaystyle t_1 = 2 years - Sum 2 lent to C (P2\displaystyle P_2) = Rs. 1,500\displaystyle Rs. \displaystyle \text{Rs. }1,500 for t2=4\displaystyle t_2 = 4 years - Total interest received from both B and C = Rs. 900\displaystyle Rs. \displaystyle \text{Rs. }900 **Step 1: Set up the Simple Interest equations** Total Interest=SIB+SICTotal Interest=SIB+SIC\displaystyle \text{Total Interest} = SI_B + SI_C 900=6000×R×2100+1500×R×4100900 = \displaystyle \frac{6000 \times R \times 2}{100} + \frac{1500 ×\displaystyle \times R ×\displaystyle \times 4}{100} 900=120R+60R900 = 120 R + 60 R 900=180R900 = 180 R **Step 2: Solve for R\displaystyle R** R=900180=5% per annumR = 900180=5\displaystyle \frac{900}{180} = 5\%  per annum\displaystyle \text{ per annum} 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

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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