CA Foundation P3 · Chapter 4 · Question 5 of 10
At what rate of simple interest per annum will a sum double itself in 8 years?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) 12.5%
Explanation
A sum doubles when SI = P. So P = P x R x 8 / 100, giving R = 100/8 = 12.5%. The value 9.05% is the compound rate, 2^(1/8) − 1, which applies only if interest is compounded.
More Mathematics of Finance MCQs
- Q7The present value of an ordinary annuity of ₹10,000 per annum for 3 years at 8% per annum compounded annually is (to the nearest paisa):
- Q8A company wants to accumulate ₹5,00,000 in 5 years through equal deposits made at the end of each year into a sinking fund earning 8% per…
- Q9The present value of a perpetuity of ₹6,000 receivable at the end of every year, when money is worth 12% per annum, is:
- Q10A loan of ₹1,00,000 is to be repaid in 3 equal annual instalments, the first payable one year after the loan, with interest at 10% per…
- Q1The simple interest on ₹12,000 at 8% per annum for 2½ years is: