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A person invested Rs. 500000 in a bank FDR @ 8% p.a. for 1 year. If interest is compounded on yearly basis, the amount payable shall be ......
a. 520000
b. 540000
c. 560000
d. 580000
Ans - b
Solution:
P = 500000
R = 8% yearly
T = 1 yr
Since compounding is annualy and its only 1-time investment, the formula to be used:
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FV = P * (1+R)^T
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So,
FV = 500000 * (1+0.08)^1
= 540000 Ans.
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A person invested Rs. 800000 in a bank FDR @ 10% p.a. for 1 year. If interest is compounded on half-yearly basis, the amount payable shall be ......
a. 872000
b. 880000
c. 882000
d. 884000
Ans - c
Solution:
P = 800000
R = 10% / 2 = 5% (since compounding is semi-annually, rate is divided by 2
T = 1*2 = 2 (since compounding is semi-annually, time is multiplied by 2)
Since compounding is semi-annually and its only 1-time investment, the formula to be used:
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FV = P * (1+R)^T
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So,
FV = 800000 * (1+0.05)^2
= 882000
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A person invested Rs. 500000 in a bank FDR @ 8% p.a. for 1 year. If interest is compounded on yearly basis, the amount payable shall be ......
a. 520000
b. 525000
c. 535000
d. 540000
Ans - d
Solution:
P = 500000
R = 8% yearly
T = 1 yr
Since compounding is annualy and its only 1-time investment, the formula to be used:
-----------------------
FV = P * (1+R)^T
-----------------------
So,
FV = 500000 * (1+0.08)^1
= 540000 Ans.
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