Mathematics of FinanceMCQMTP June 22Question 1358 of 512
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In how many years will a sum of money becomes four times at $12\%$ p.a. simple interest?

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

✅ Option c — $25$ years

All Options:

  • A$18$ years
  • B$21$ years
  • C$25$ years
  • D$16$ years

Detailed Solution & Explanation

**Derivation of Time to Quadruple Principal** Given: - Rate (R\displaystyle R) = $12\%$ per annum simple interest - Let the sum be P\displaystyle P. Amount (A\displaystyle A) = $4P$ **Step 1: Calculate Simple Interest (SI\displaystyle SI)** SI=A−P=4P−P=3PSI = A - P = 4P - P = 3P **Step 2: Set up the Simple Interest formula** SI=P×R×t100SI = P×R×t100\displaystyle \frac{P \times R \times t}{100} 3P=P×12×t1003P = P×12×t100\displaystyle \frac{P \times 12 \times t}{100} 3=0.12t3 = 0.12 t t=30.12=25 yearst = 30.12=25\displaystyle \frac{3}{0.12} = 25  years\displaystyle \text{ years} *(Note: The database lists Option D ($16$ years) as correct, which is a textbook discrepancy. The mathematically correct period is 25 years, which is Option C.)* 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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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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