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Q:

If Rs.10 be allowed as true discount on a bill of Rs.110 at the end of a certain time , then the discount allowed on the same sum due at the end of double the time is

A) 18.20	B) 18.33
C) 18	D) 18.30

Answer & Explanation Answer: B) 18.33

Explanation:

Present worth = Amount - True Discount = 110 -10 = Rs.100

SI on Rs.100 for a certain time = Rs.10

SI on Rs.100 for doube the time = Rs.20

True Discount on Rs.120 = 120 - 100 = Rs.20

True Discount on Rs.110 = $(110 \times \frac{20}{120})$ = Rs.18.33

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Q:

A has to pay Rs.220 to B after 1yr. B asks A to pay Rs.110 in cash and defer the payment of Rs.110 for 2 yrs. A agrees to it. If the rate of interest be 10% per annum in this mode of payment:

A) A gains Rs.11	B) There is No gain or loss
C) A losses 7.43	D) A gains Rs. 7.34

Answer & Explanation Answer: D) A gains Rs. 7.34

Explanation:

A has to pay = Present worth of Rs220 due 1yr hence

= Rs.[(220 x 100)/100+(10 x 1)] = Rs.200

A actually pays = Rs.110+PW of Rs.110 due 2 yrs hence

= [110+(110 x 100)] / [100+(10 x 2)] = Rs.192.66

So, A gains Rs. (200-192.66) = Rs.7.34

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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:

Simple interest on a certain sum of money for 3 years at 8% per annum is half the compound interest on Rs. 4000 for 2 years at 10% per annum. The sum placed on simple interest is:

A) Rs.1550	B) Rs.1650
C) Rs,1750	D) Rs.1850

Answer & Explanation Answer: C) Rs,1750

Explanation:

C.I.= Rs.[4000*(1+10/100)^2-4000]

=Rs.840

sum=Rs.(420 * 100)/3*8=Rs.1750

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

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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Q:

Albert invested an amount of Rs. 8000 in a fixed deposit scheme for 2 years at compound interest rate 5 p.c.p.a. How much amount will Albert get on maturity of the fixed deposit

A) Rs.8820	B) Rs.8620
C) Rs.8520	D) Rs.8320

Answer & Explanation Answer: A) Rs.8820

Explanation:

Amount = $R s . [8000 * {(1 + \frac{5}{100})}^{2}]$ =Rs.8820

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Q:

A man buys a watch for Rs1950 in cash and sells it for Rs 2200 at a credit of 1 yr. The rate of interest is 10% per annum. Then he gains or loose how much amount?

A) 50	B) 55
C) 15	D) 45

Answer & Explanation Answer: A) 50

Explanation:

S.P = P.W of Rs. 2200 due 1yr hence = Rs. [(2200 x 100)/100+(10 x 1)] = Rs.2000

Gain = Rs.(2000-1950) = Rs. 50

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

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