2
Q:

A merchant receives an invoice for a motor boat for $20 000 with terms 4/30, n/100. What is the highest simple interest rate at which he can afford to borrow money in order to take advantage of the discount?

A) 247.67 B) 237.67
C) 227.67 D) 215.67

Answer:   A) 247.67



Explanation:

Suppose the merchant will take advantage of the cash discount of 4% of $20 000 = $800 by paying the bill within 30 days from the date of invoice. He needs to borrow $20 000 = $800 = $19 200. He would borrow this money on day 30 and repay it on day 100 (the day the original invoice is due) resulting in a 70-day loan. The interest he should be willing to pay on borrowed money should not exceed the cash discount $800.

 

r=I/pt=21.73%

 

The highest simple interest rate at which the merchant can afford to borrow money is 21.73%. This is a break-even rate. If he can borrow money, say at a rate of 15%, he should do so. He would borrow $19 200 for 70 days at 15%. Maturity value of the loan is $19 200(1+0.15(70/365))=$19 752.33

 

savings would be $20 000 − $19 752.33 = $247.67

Q:

What is the total earning after 2 years from Rs.18,750 on variable compound interest if the rate of interest for the first 4 year is 4% and for the second, it is 8%?

A) ₹ 1,740 B) ₹ 1,760
C) ₹ 1,670 D) ₹ 2,310
 
Answer & Explanation Answer: D) ₹ 2,310

Explanation:
Report Error

View Answer Report Error Discuss

1 1565
Q:

The simple interest on a sum of Rs.50,000 at the end of two years is Rs.4,000. What would be the compound interest on the same sum at the same rate for the same period ?

 

A) 4,040   B) 4,080  
C) 4,008   D) 8,000  
 
Answer & Explanation Answer: B) 4,080  

Explanation:
Report Error

View Answer Report Error Discuss

0 1576
Q:

Rs. 775 invested for 6 years gives an interest of Rs. 372. The rate of simple interest per annum is:

 

A) 8% B) 7%
C) 9% D) 7.5 %
 
Answer & Explanation Answer: A) 8%

Explanation:
Report Error

View Answer Report Error Discuss

0 250
Q:

In how many wars will an amount be doubled at 28.75% annual rate of interest?

 

A) 3.00 B) 3.90
C) 3.47 D) 6.00
 
Answer & Explanation Answer: C) 3.47

Explanation:
Report Error

View Answer Report Error Discuss

0 336
Q:

If in 13 years a fixed sum doubles at simple interest, what will be the interest rate per year? (Correct to two decimal places)

 

A) 8.69%   B) 7.69%  
C) 7.29%   D) 7.92%  
 
Answer & Explanation Answer: B) 7.69%  

Explanation:
Report Error

View Answer Report Error Discuss

0 141
Q:

The rate of simple interest on a sum of money is 5% p.a. for the first 4 years, 8% p.a. for the next 3 years and 10% p.a. for the period beyond 7 years. If the simple interest accrued by the sum over a period of 10 years is ₹1,850, then the sum is:

 

A) ₹2,750 B) ₹1,650
C) ₹2,500 D) ₹1,500
 
Answer & Explanation Answer: C) ₹2,500

Explanation:
Report Error

View Answer Report Error Discuss

2 289
Q:

45-15

A) 25 B)
C) D)
 
Answer & Explanation Answer: A) 25

Explanation:
Report Error

View Answer Report Error Discuss

0 237
Q:

When two equal amounts are deposited for 5 years and 3 years at the rate of 7% and 9% per annum respectively, and the difference of their simple interest is Rs 475. Then find the deposited amount.

 

A) Rs. 5,937.5 B) Rs. 5,992.5  
C) Rs. 5,837.5 D) Rs. 6,037.5
 
Answer & Explanation Answer: A) Rs. 5,937.5

Explanation:
Report Error

View Answer Report Error Discuss

1 238