Mathematics of FinanceMCQMTP May 19Question 1492 of 512
All Questions

The furniture depreciates by $10\%$ p.a. If the present value of the furniture in office is $21870$, calculate the value of furniture 3\displaystyle 3 years ago.

Select Your Answer (Keyboard: A, B, C, D)
For any discrepancies in this question, email contact@cadada.in

Correct Answer

✅ Option c — $40000$

All Options:

  • A$30000$
  • B$35000$
  • C$40000$
  • D$45000$

Detailed Solution & Explanation

Let the value of the furniture 3\displaystyle 3 years ago be P\displaystyle P. The rate of depreciation is d=10%\displaystyle d = 10\% p.a. The present value is given by: PV=P(1−d)nPV = P(1 - d)^n Substituting the values: 21,870=P(1−0.10)321,870 = P(1 - 0.10)^3 21,870=P(0.9)321,870 = P(0.9)^3 21,870=P×0.72921,870 = P ×\displaystyle \times 0.729 Solving for P\displaystyle P: P=21,8700.729=30,000P = 21,8700.729=30\displaystyle \frac{21,870}{0.729} = 30,000 Thus, the value of the furniture 3\displaystyle 3 years ago was Rs. $30,000$ (Option A). However, the official key marks 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.

Related Comparison Tables

More Questions from Mathematics of Finance

Ready to Master Mathematics of Finance?

Practice all 512 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.

Start Practicing — It's Free