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Q:

# A chartered bank offers a five-year Escalator Guaranteed Investment Certificate.In successive years it pays annual interest rates of 4%, 4.5%, 5%, 5.5%, and 6%, respectively, compounded at the end of each year. The bank also offers regular five-year GICs paying a fixed rate of 5% compounded annually. Calculate and compare the maturity values of $1000 invested in each type of GIC. (Note that 5% is the average of the five successive one-year rates paid on the Escalator GIC.)  A) 1276.28 B) 1234 C) 1278 D) 1256 Answer: A) 1276.28 Explanation: FV =$1000(1.04)(1.045)(1.05)(1.055)(1.06) = $1276.14 the maturity value of the regular GIC is FV =$ 1000 x $1.055$=  \$1276.28

Q:

If Rs. 2,000 is invested at the rate of 20% per annum, compounded half-yearly, then the amount after 18 months will be:

 A) Rs.2628 B) Rs.2662 C) Rs.2600 D) Rs.3200

Answer & Explanation Answer: D) Rs.3200

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0 388
Q:

Calculate the principal if an amount of Rs. 441 is received on compound interest at the rate of 5% per annum after 2 years.

 A) Rs.400 B) Rs.390 C) Rs.380 D) Rs.350

Answer & Explanation Answer: A) Rs.400

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2 313
Q:

Gitesh took a loan for 4 years at 5% Compound Interest. If the total interest paid was Rs. 431.01, Calculate the principal.

 A) Rs. 2000 B) Rs. 2050 C) Rs. 2100 D) Rs. 2150

Answer & Explanation Answer: A) Rs. 2000

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0 298
Q:

A sum of Rs 20000 becomes Rs 32000 in 12 years, when invested in a scheme of simple interest. If the same sum is invested in a scheme of compound interest with same yearly interest rate (compounding of interest is done yearly), then what will be the amount (in Rs) after 2 years?

 A) 21750 B) 22050 C) 23250 D) 24650

Answer & Explanation Answer: B) 22050

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0 251
Q:

A sum of Rs 4000 becomes Rs 5800 in 3 years, when invested in a scheme of simple interest. If the same sum is invested in a scheme of compound interest with same yearly interest rate (compounding of interest is done yearly), then what will be the amount (in Rs) after 2 years?

 A) 4430 B) 5450 C) 5290 D) 4970

Answer & Explanation Answer: C) 5290

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1 266
Q:

The maturity value of a certain sum after two years at 20% p.a. interest compounded annually is Rs. 14,400/-. Find the Principal amount.

 A) Rs.9000 B) Rs.9500 C) Rs.10,000 D) Rs.10,500

Answer & Explanation Answer: C) Rs.10,000

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1 267
Q:

Shams invested Rs. 5000 at 10% per annum compound interest. After n years, Shams received Rs. 1655 more. Find the value of n.

 A) 3 years B) 4 years C) 2 years D) 1 year

Answer & Explanation Answer: A) 3 years

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4 584
Q:

A sum of Rs 6000 becomes Rs 7200 in 2 years, when invested in a scheme of simple interest. If the same sum is invested in a scheme of compound interest with same yearly interest rate (compounding of interest is done yearly), then what will be the amount (in Rs) after 3 years?

 A) 7434 B) 8244 C) 7864 D) 7986

Answer & Explanation Answer: D) 7986

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