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Q:

For a nominal interest rate of 8.4%, what is the compounding frequency if the periodic interest rate is 4.2

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

Answer & Explanation Answer: B) 2

Explanation:

i=j/m

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Filed Under: Compound Interest
Exam Prep: Bank Exams
Job Role: Bank PO

Q:

Kashundra Jones plans to make a lump sum deposit so that she can withdraw $3,000 at the end of each quarter for 10 years. Find the lump sum if the money earns 10% per year compounded quarterly

A) 75263.64	B) 76345
C) 76389	D) 56897

Answer & Explanation Answer: A) 75263.64

Explanation:

A=R[(1+i)^n-1]/i(1+i)^n

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Filed Under: Compound Interest
Exam Prep: Bank Exams
Job Role: Bank PO

Q:

What is the difference between the compound interests on Rs. 5000 for 1 1/2 years at 4% per annum compounded yearly and half-yearly?

A) 2.04	B) 3.04
C) 4.04	D) 5.04

Answer & Explanation Answer: A) 2.04

Explanation:

C.I. when interest
compounded yearly=rs.[5000*(1+4/100)(1+1/2*4/100)]

= Rs. 5304.

C.I. when interest is
compounded half-yearly=rs.5000(1+2/100)^3

= Rs. 5306.04
Difference = Rs. (5306.04 - 5304) = Rs. 2.04

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Filed Under: Compound Interest
Exam Prep: Bank Exams
Job Role: Bank PO

Q:

The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Re. 1. The sum (in Rs.) is:

A) 625	B) 635
C) 645	D) 655

Answer & Explanation Answer: A) 625

Explanation:

Let the sum be Rs. x. Then

C.I=x[1+4/100)^2-x]=[626/675x-x]

S.I=x^2/25

C.I-S.I=1

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Filed Under: Compound Interest
Exam Prep: Bank Exams
Job Role: Bank PO

Q:

A bill falls due in 1 year.The creditor agrees to accept immediate payment of the half and to defer the payment of the other half for 2 years.By this arrangement ins Rs.40.what is the amount of the bill,if he money be worth 12.5%?

A) 1200	B) 3000
C) 3600	D) 1300

Answer & Explanation Answer: C) 3600

Explanation:

Let the sum be Rs. x. Then,

$[\frac{x}{2} + \frac{\frac{x}{2} \times 100}{100 + (\frac{25}{2} \times 2)}] - \frac{x \times 100}{100 + (\frac{25}{2} \times 1)} = 40$

(x/2)+(2x/5)-(8x/9) = 40

x=3600.

Therfore, amount of bill=Rs. 3600.

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Filed Under: True Discount

Q:

In a class, 30% of the students offered English, 20% offered Hindi and 10% offered both. If a student is selected at random, what is the probability that he. has offered English or Hindi ?

A) 1/2	B) 3/4
C) 4/5	D) 2/5

Answer & Explanation Answer: D) 2/5

Explanation:

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Filed Under: Probability

Q:

A man and his wife appear in an interview for two vacancies in the same post. The probability of husband's selection is (1/7) and the probability of wife's selection is (1/5). What is the probability that only one of them is selected ?

A) 2/7	B) 1/7
C) 3/4	D) 4/5

Answer & Explanation Answer: A) 2/7

Explanation:

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Filed Under: Probability

Q:

A man purchased a cow for Rs. 3000 and sold it the same day for Rs. 3600, allowing the buyer a credit of 2 years. If the rate of interest be 10% per annum, then the man has a gain of:

A) 0%	B) 5%
C) 7.5%	D) 10%

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