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Mr. X is to invest Rs. 100000 every year for the next 5 years (at the beginning of the period) @ 5%. How much he would have at the end of the 5-year period?
a. 580191
b. 581091
c. 581901
d. 589101
Ans - a
Solution:
P = 1000000
R = 5% p.a.
T = 5 Y
This ques asks the FUTURE VALUE OF INVESTMENT AT THE BEGINNING OF PERIOD, so, FVAD (Future
Value of Annuity Due) is applied.
The formula of FVAD =
------------------------------------------------------------
FVAD = (C ÷ R) x { (1 + R)^T - 1 } x (1 + R)
------------------------------------------------------------
So,
FVAD = (100000÷0.05) x {{1+0.05}^5 – 1} x (1 + 0.05)
= 552563 × 1.05 = 580191 Ans
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Mr. X is to receive Rs. 100000, as interest on bonds by end of each year for 5 years @ 5% ROI. Calculate the present value of the amount he is to receive.
a. 423498
b. 423948
c. 432498
d. 432948
Ans - d
Solution:
P = 10000
R = 5% p.a.
T = 5 Y
This ques asks the PRESENT VALUE OF INVESTMENT AT THE END OF PERIOD, so, PVOA (Present
Value of Ordinary Annuity) is applied.
The formula of PVOA =
--------------------------------------------------------------------
PVOA = (C ÷ R) x { (1 + R)^T - 1 } ÷ (1 + R)^T
--------------------------------------------------------------------
So,
PVOA = (100000÷0.05) x {(1+0.05)^5 – 1} ÷ (1+0.05)^5
= 432948 Ans
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Mr. X is to receive Rs. 100000, as interest on bonds at the beginning of each year for 5 years @ 5% ROI. Calculate the present value of the amount he is to receive.
a. 445596
b. 454596
c. 456496
d. 446596
Ans - b
Solution:
P = 10000
R = 5% p.a.
T = 5 Y
---------------------------------------------------------------------------------
PVAD = (C ÷ R) x { (1 + R)^T - 1 } x (1 + R) ÷ (1 + R)^T
---------------------------------------------------------------------------------
So,
PVAD = (100000÷0.05) x {(1+0.05)^5 – 1} x (1+0.05) ÷ (1+0.05)^5
= 454596 Ans
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Rajesh borrowed Rs. 50000 from the bank @ 12% p.a. for 1 year, payable on EMI basis. The amount of EMI will be?
a. 4424.24
b. 4244.24
c. 4424.44
d. 4442.44
Ans - d
Solution:
P = 50000
R = 12% / 12 = 0.01% (In EMI or Equated Monthly Instalment, we need to find monthly rate, so we divide rate by 12)
T = 1*12 = 12 (In EMI or Equated Monthly Instalment, we multiply time with 12)
The formula of EMI =
--------------------------------------------------
P * R * (1 + R)^T ÷ { (1 + R)^T - 1 }
--------------------------------------------------
So,
EMI = 50000*0.01*(1+0.01)^12 ÷ {(1+0.01)^12 – 1}
= (50000*0.01*1.126825) ÷ 0.126825
= 563.4125 / 0.126825
= 4442.44
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Ram availed a house loan of Rs. 20 lac @ 12% ROI repayable in 15 years. Calculate EMI.
a. 23004
b. 23404
c. 24003
d. 24303
Ans - c
Solution:
P = 10 lac
R = 12% / 12 = 0.01% (In EMI or Equated Monthly Instalment), we need to find monthly rate, so we divide rate by 12)
T = 12*15 = 180 (In EMI or Equated Monthly Instalment, we multiply time with 12)
The formula of EMI =
--------------------------------------------------
P * R * (1 + R)^T ÷ { (1 + R)^T - 1 }
--------------------------------------------------
So,
EMI = 2000000*0.01*(1+0.01)^180 ÷ {(1+0.01)^180 – 1}
= (2000000*0.01*5.9958) ÷ 4.9958
= 119916 / 4.9958
= 24003
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Anita borrowed an amount of Rs. 500000 for 10 years @ 9% ROI. What shall be monthly payment?
a. 8445
b. 8454
c. 8545
d. 8554
Ans - a
Solution:
P = 500000
R = 9 % ÷ 12 = 0.0075% (In EMI, divide rate by 12)
T = 10*12 = 120 (In EMI, multiply time with 12)
The formula of EMI =
--------------------------------------------------
P * R * (1 + R)^T ÷ { (1 + R)^T - 1 }
--------------------------------------------------
So,
EMI = 500000 * 0.0075 * 1.0075^120 ÷ (1.0075^120 – 1)
= (500000*0.0075*2.4514) ÷ 1.4514
= 12257 / 1.4514
= 8445
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