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Q:

Calculate the effective interest rate of a 10% annual rate compounded continuously.

A) 9.52%	B) 10.52%
C) 11.52%	D) 12.52%

Answer & Explanation Answer: B) 10.52%

Explanation:

E=e^i-1

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

Q:

A man bought 20 shares of Rs. 50 at 5 discount, the rate of dividend being 13 $\frac{1}{2}$ . The rate of interest obtained is:

A) 13%	B) 12
C) 15%	D) 16%

Answer & Explanation Answer: C) 15%

Explanation:

Investment = Rs. [20 x (50 - 5)] = Rs. 900.

Face value = Rs. (50 x 20) = Rs. 1000.

Dividend = $R s . (\frac{27}{2} * \frac{1000}{100}) = R s . 135$

Interest obtained = $\frac{135}{900} * 100$ % = 15%

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Filed Under: Stocks and Shares

Q:

Find the annual interest rate that produces $100,000 from $20,000 in 15 years.

A) 9.33%	B) 10.33%
C) 11.33%	D) 12.33%

Answer & Explanation Answer: C) 11.33%

Explanation:

l=(F/P)^1/n-1

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

Q:

Find the principal which yields $25,000 when invested at 3% annually for 20 years.

A) 13841.89	B) 14821
C) 13468	D) 57389

Answer & Explanation Answer: A) 13841.89

Explanation:

$P = \frac{F}{{(1 + i)}^{n}}$

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

Q:

Calculate the future value of $3,000 invested at 7% for 5 years

A) 4207.66	B) 5207
C) 4376	D) 5687

Answer & Explanation Answer: A) 4207.66

Explanation:

F=P(1+i)^n

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

Q:

Derrick's dad bought new tires for $900 using a credit card. His card has an interest rate of 19%. If he has no other charges on his card and does not pay off his balance at the end of the month, how much money will he owe after one month?

A) 11.25	B) 13.25
C) 14.25	D) 15.25

Answer & Explanation Answer: C) 14.25

Explanation:

I=prt

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

Q:

Rondell's parents borrow $6,300 from the bank for a new car. The interest rate is 6% per year. How much simple interest will they pay if they take 2 years to repay the loan?

A) 556	B) 665
C) 756	D) 856

Answer & Explanation Answer: C) 756

Explanation:

I=prt

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

Q:

In order to obtain an income of Rs. 650 from 10% stock at Rs. 96, one must make an investment of:

A) 3100	B) 6240
C) 6500	D) 9600

Answer & Explanation Answer: B) 6240

Explanation:

To obtain Rs. 10, investment = Rs. 96.

To obtain Rs. 650, investment = $R s . \frac{96 * 650}{10}$ = Rs. 6240.

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Filed Under: Stocks and Shares

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