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Q:

Shawn invested one half of his savings in a bond that paid simple interest for 2 years and received Rs.550 as interest. He invested the remaining in a bond that paid compound interest, interest being compounded annually, for the same 2 years at the same rate of interest and received Rs.605 as interest. What was the value of his total savings before investing in thesetwo bonds?

A) Rs.2543	B) Rs.2534
C) Rs.2546	D) Rs.2750

Answer & Explanation Answer: D) Rs.2750

Explanation:

Shawn received an extra amount of (Rs.605 – Rs.550) Rs.55 on his compound interest paying bond as the interest that he received in the first year also earned interest in the second year.

The extra interest earned on the compound interest bond = Rs.55

The interest for the first year =550/2 = Rs.275

Therefore, the rate of interest = $\frac{55}{275} * 100$ = 20% p.a.

20% interest means that Shawn received 20% of the amount he invested in the bonds as interest.

If 20% of his investment in one of the bonds = Rs.275, then his total investment in each of the bonds = $\frac{275}{20} * 100$ = 1375.

As he invested equal sums in both the bonds, his total savings before investing = 2 x 1375 =Rs.2750.

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Filed Under: Compound Interest
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Q:

The population of a town was 3600 three years back. It is 4800 right now. What will be the population three years down the line, if the rate of growth of population has been constant over the years and has been compounding annually?

A) Rs.600	B) Rs,6400
C) Rs.6500	D) Rs.6600

Answer & Explanation Answer: B) Rs,6400

Explanation:

The population grew from 3600 to 4800 in 3 years. That is a growth of 1200 on 3600 during three year span.

Therefore, the rate of growth for three years has been constant.

The rate of growth during the next three years will also be the same.

Therefore, the population will grow from 4800 by $4800 * \frac{1}{3}$ = 1600

Hence, the population three years from now will be 4800 + 1600 = 6400

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Q:

What will Rs.1500 amount to in three years if it is invested in 20% p.a. compound interest, interest being compounded annually?

A) Rs.2592	B) Rs.2492
C) Rs.2352	D) Rs.2352

Answer & Explanation Answer: A) Rs.2592

Explanation:

The usual way to find the compound interest is given by the formula A = .p(1+r/100)^n

In this formula,

A is the amount at the end of the period of investment

P is the principal that is invested

r is the rate of interest in % p.a

And n is the number of years for which the principal has been invested.

In this case, it would turn out to be A =1500(1+20/100)^3

= 2592.

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Q:

A man wants to sell his scooter .There are two offers one at Rs12000 cash and other at a credit of Rs12880 to be paid after 8 months ,money being at 18% per annum which is better offer?

A) Rs.12880	B) Rs.12000
C) Both are equally good	D) None of the above

Answer & Explanation Answer: B) Rs.12000

Explanation:

PW of Rs.12,880 due 8 months hence

= Rs. [12880 x 100] / [100+(18 x 8/12)] =Rs.11500

Clearly 12000 in cash is a better offer.

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Q:

If Rs.20 is the True Discount on Rs260due after a certain time.What wil be true discount on the same sum due after half of the former time, the rate of interest being the same?

A) Rs.9.40	B) Rs.10.14
C) Rs.10.40	D) Rs.9.14

Answer & Explanation Answer: C) Rs.10.40

Explanation:

Simple Interest on Rs. (260-20) for a gven time= Rs.20

Simple Interest on Rs. (260-20) for a half time = Rs.10

True Discount on Rs.250 = Rs.10

True Discount on Rs.260 = Rs.[(10/250) x 260] = Rs. 10.40

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Q:

The effective annual rate of interest corresponding to a nominal rate of 6% per annum payable half-yearly is

A) 6.06%	B) 6.07%
C) 6.08%	D) 6.09%

Answer & Explanation Answer: D) 6.09%

Explanation:

Amount of Rs. 100 for 1 year

when compounded half-yearly = Rs.[100*(1+3/100)^2]=Rs.106.09

Effective rate=(106.09-100)%=6.09%

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Filed Under: Compound Interest
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Q:

The least number of complete years in which a sum of money put out at 20% compound interest will be more than doubled is:

A) 3	B) 4
C) 5	D) 6

Answer & Explanation Answer: B) 4

Explanation:

$P {(1 + \frac{20}{100})}^{n} > 2 P \Leftrightarrow {(\frac{6}{5})}^{n} > 2$

$(\frac{6}{5} \times \frac{6}{5} \times \frac{6}{5} \times \frac{6}{5}) > 2$

so, answer is 4 years

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Q:

Which one of the following is not a mixture

A) air	B) mercury
C) milk	D) cement

Answer & Explanation Answer: B) mercury

Explanation:

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Filed Under: Chemistry

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