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Q:

Find the finance charge for an average daily balance of $8431.10 with monthly interest rate of 1.4%

A) 98.04	B) 88.04
C) 68.04	D) 118.04

Answer & Explanation Answer: D) 118.04

Explanation:

0.014*8431.10

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Q:

A retirement benefit of $12,000 is to be paid every 6 months for 25 years at interest rate of 7% compounded semi-annually. Find

(a) the present value to fund the end-of-period retirement benefit.

(b) the end-of-period semi-annual payment needed to accumulate the value in part (a) assuming regular investments for 30 years in an account yielding 8% compounded semi-annually

A) 245678	B) 234689
C) 281468.06	D) 234578

Answer & Explanation Answer: C) 281468.06

Explanation:

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

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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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Q:

What lump sum deposited today would allow payments of $2000/year for 7 years at 5% compounded annually?

A) 11572.71	B) 11876
C) 189756	D) 11576

Answer & Explanation Answer: A) 11572.71

Explanation:

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

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Q:

For S = $21,000, payments (R) of $1500 at the end of each 6-month periodi= 10% compounded semi-annually. Find the minimum number of payments to accumulate 21,000.

A) 10	B) 11
C) 12	D) 13

Answer & Explanation Answer: B) 11

Explanation:

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

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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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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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Q:

In a lottery, there are 10 prizes and 25 blanks. A lottery is drawn at random. What is the probability of getting a prize ?

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

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