10

Chapter 4 (C)
1. How much amount is required to be invested every year as to accumulate Rs.
6,00,000 at the end of 10th year, if interest is compounded annually at 10% rate of
interest? [Given : (1.1)10 = 2.59374]
(a) Rs.37,467 (b) Rs.37,476
(c) Rs.37,647 (d) Rs.37,674 June – 14

2. The future value of an annuity of Rs.1,000 made annually for 5 years at the rate of
interest 14% compound annually is
(a) Rs.5610 (b) Rs.6610
(c) Rs.6160 (d) Rs.5160 Dec. 14

3. Suppose your mom decides to gift you Rs. 10,000 every year starting from today
for the next sixteen years. You deposit this amount in a bank as and when you
receive and get 8.5% per annum interest rate compounded annually. What is the
present value of this money:
(a) 83042 (b) 90100
(c) 93042 (d) 10100 Dec. 15

4. Mr. X bought an electronic item for Rs.1000. What would be the future value of the
item after two years, if the value is compounded semi-annually at the rate of 22%
per annum?
(a) Rs.1488.40 (b) Rs.1518.07
(c) Rs.2008.07 (d) Rs.2200.00 June 16

5. The future value of an annuity of Rs. 1,500 made annually for 5 years at an interest
rate of 10% compounded annually is _____ (Given that (1.1)5 = 1.61051)
(a) 9517.56 (b) 9157.65
(c) 9715.56 (d) 9175.65 June 17

For Other Problem: - https://t.me/joinchat/V0h8Cj5PdtA3NzE1

 11

6. What sum should be invested at the end of every year so as to accumulate an

amount of Rs. 7,96,870 at the end of 10 years at the rate of interest 10% compound
annually.
(a) 40,000 (b) 4,50,000
(c) 4,80,000 (d) 50,000 June 17

7. A person invests ` 2,000 at the end of each month @ of interest 6% compounding

monthly, find the amount of annuity after the 10th payment is:
(a) ` 20,456 (b) ` 20,156
(c) ` 20,256 (d) ` 20,356 June 18

8. Find the future value of an annuity of Rs.5000 is made annually for 7 years at the
rate of interest 14% Is.
(a) Rs.53,356.57 (b) Rs. 56,653.57
(c) Rs.53,563.57 (d) Rs. 53, 653.57 June 19

9. Determine the present value of perpetuity of Rs. 50,000 per month @ Rate of
interest 12% p.a. is _____________
(a) Rs. 45,00,000 (b) 50,00,000
(c) Rs. 55,00,000 (d) 60,00,000
June 19(F)
10. What is the net present value of piece of property which would be valued at `2 lakh
at the end of 2 years? (Annual rate of increase = 5%)
(a) ` 2.00 lakh (b) ` 1.81 lakh
(c) `2.01 lakh (d) None of the above
Dec. 18(F)
11. A person wants to lease out a machine costing Rs. 5,00,000 for a 10 year period. It
has fixed a rental of Rs. 51,272 per annum payable annually starting from the end of
first year. Suppose rate of interest is 10% per annum, compounded annually on 11.
which money can be invested. To whom this agreement is favourable?
(a) Favour for lessee (b) Favour for lessor
(c) Not for both (d) Can’t be determined
June 19 (F)

12. Let a person invest a fixed sum at the end of each month in an account paying
interest 12% per year compounded monthly. It the future value of this annuity after
the 12th payment is Rs. 55,000 then the amount invested every month is?
(a) Rs. 4,8,37 (b) Rs. 4,637
(c) Rs. 4,337 (d) Rs. 3337 June 19(F)

13. Find the future value of annuity of `500 is made annually for 7 years interest rate of
14% compound at annually. Given that (1.14)7 = 2.5023
(a) ` 5635.35 (b) ` 5365.35
(c) ` 6535.35 (d) ` 6355.35 Nov. 19 (F)

14. Which of the following statements is true?

(a) F.V of ordinary annuity < F.V of annuity due
(b) F.V of ordinary annuity > F.V of annuity due
(c) P.V of ordinary annuity > P.V of annuity due
(d) None of the these Dec. 20 (F)

15. Suppose you deposit Rs. 900 per month into an account that pays 14.8% interest
compound monthly. How much money will you get after 9 months?
(a) Rs. 8,511 (b) Rs. 9,000
(c) Rs. 9,200 (d) Rs. 1,000 Dec. 20(F)

For Other Problem: - https://t.me/joinchat/V0h8Cj5PdtA3NzE1

 12

16. Rs. 2,500 is paid every year for 10 years to pay off a loan. What is the loan amount if
interest rate be 14% per annum compounded annually?
(a) 13,040.27 (b) 15,847.90
(c) 14,674.21 (d) 16,345.11 Dec. 20(F)
17. Find the present value of Rs. 1,00,000 be required after 5 years if the rate of
interest is 9% given that (1.09)5 = 1.5386
(a) 78,995.98 (b) 64,994.20
(c) 88,992.43 (d) 93,902.12 Dec. 20 (F)

18. Determine the present value of perpetuity Rs. 10 per month for infinite period at an
effective rate of interest of 14% p.a.?
(a) Rs. 657 (b) Rs. 757
(c) Rs. 857 (d) Rs. 957 Dec. 20(F)

19. Find the future value of annuity of Rs. 1,000 made annually for 7 years at interest
rate of 14% compounded annually. Given that (1.14)7 = 2.5023
(a) 10,730. 7 (b) 5,365.36
(c) 8,756 (d) 9,892.34
Dec. 20(F), Jan. 21(F)
20. A five year annuity due has periodic cash flow of Rs. 100 each year, If the interest
rate is 8% the future value of this annuity is given by
(a) (Rs. 100) × (future value at rate 8% for 5 years) × (0.08)
(b) (Rs. 100) ×(future value at rate 8% for 5 years) × (1–.08)
(c) (Rs. 100) × (future value at rate 8% for 5 years) × (1+.08)
(d) (Rs. 100) × (future value at rate 8% for 5 years) ×(1/0.08) Dec. 20(F)

21. If the desired future value after 5 years with 18% interest rate is Rs. 1,50,000, then
the present value (in Rs. ) is (Given that (1.18)5 = 2.2877)
(a) 63,712 (b) 65,568
(c) 53,712 (d) 4117 July. 21(F)

22. Find the future value of annuity of Rs. 1,000 made annually for 7 years at interest
rate of 14% compounded annually [Given that 1.147 = 2.5023]
(a) Rs. 10,730.7 (b) Rs. 5,365.35
(c) Rs. 8,756 (d) RS. 9,892.34 Jan. 21(F)

23. Assuming that the discount rate is 7% p.a. how much would you pay to receive Rs.
200, growing at 5% annually, for ever?
(a) Rs. 2, 500 (b) Rs. 5,000
(c) Rs. 7,500 (d) Rs. 10,000 Jan. 21(F)
24. Rs. 800 is invested at the end of each month in an amount paying interest 5% per
year compounded monthly. What is the future value of this annuity after tenth
payment? (Given that (1.005)10 = 1.0511)
(a) Rs. 4,444 (b) Rs. 8,756
(c) Rs. 3,491 (d) Rs. 8,176 Jan. 21(F)

For Other Problem: - https://t.me/joinchat/V0h8Cj5PdtA3NzE1

 13

25. The present value of an Annuity immediate is the same as

(a) Annuity regular for (n–1) years plus the initial receipt in the beginning of the
period
(b) Annuity regular for (n–1) years
(c) Annuity regular for (n + 1) years
(d) Annuity regular for (n + 1) years plus the initial receipt in the beginning of the
period.
Jan. 21(F)
26. A loan of Rs. 1,02,000 is to be paid back in two equal annual instalments. If the rate
of interest is 4% p.a., compounded annually, then the total interest charged (in Rs.)
under this instalment plan is
(a) 6,160 (b) 8120
(c) 5980 (d) 7560 July. 21(F)

27. If the nominal rate of growth is 17% and inflation is 9% for the five years. Let P be
the Gross Domestic Product (GDP) amount at the present year then the projected
real GDP after 6 years is
(a) 1.587 P (b) 1.921 P
(c) 1.403 P (d) 2.51 P July. 21(F)
28. If a person bought a house by paying Rs. 45,00,000 down payment and Rs. 80,000 at
the end of each year till the perpetuity assuming the rate of interest as 16% , the
present value of house (in Rs.) is given as
(a) 47,00,000 (b) 45,00,000
(c) 57,80,000 (d) 50,00,000 July. 21(F)
29. Let the operating profit of a manufacturer for five years is given as :
Year 1 2 3 4 5 6
Operating profit (in 90 100 106.4 107.14 120.24 157.35
Lakh Rs.)
Then the operating profit of Compound Annual Growth Rate (CAGR) for year 6 with
respect to year 2 is given at
(a) 9% (b) 12%
(c) 11% (d) 13% Jan. 21(F)
30. If discount rate is 14% per annum, then how much a company has to pay to receive
Rs. 280 growing at 9% annually forever.
(a) Rs. 5,600 (b) Rs. 2,800
(c) Rs. 1, 400 (d) Rs. 4,200 July. 21(F)
31. If the cost of capital be 12% per annum., then the net present value (in nearest Rs.)
from the given cash flow is given as
Year 0 1 2 3
(100) 60 40 50
Operating profit (in thousands Rs.)
(a) 3,1048 (b) 34185
(c) 51048 (d) 24187(21047) July. 21(F)
32. The future value of annuity of Rs. 2,000 for 5 years at 5% compounded annually is
given (in nearest Rs. )as
(a) 51,051 (b) 21021
(c) 15624 (11051) (d) 61254 July. 21(F)

*************

For Other Problem: - https://t.me/joinchat/V0h8Cj5PdtA3NzE1