Related Mcqs:

1. If ‘S’ is the amount available after ‘n’ interest periods for an initial principal ‘P’ with the discrete compound interest rate ‘i’, the present worth is given by__________________?

   A. (1 + i)n/S
   B. S/(1 + i)n
   C. S/(1 + in)
   D. S/(1 + n)i

2. If the interest rate of 10% per period is compounded half yearly, the actual annual return on the principal will be ______________ percent ?

   A. 10
   B. 20
   C. > 20
   D. < 20

3. The amount of compounded interest during ‘n’ interest periods is_________________?

   A. p[(1+i)n – 1)]
   B. p(1 + i)n
   C. p(1 – i)n
   D. p(1 + in)

4. An annuity is a series of equal payments occuring at equal time intervals, and this amount includes the sum of all payments plus interest, if allowed to accumulate at a definite rate of interest from the time of initial payment to the end of annuity term. Ordinary annuity is used in the calculation of the__________________?

   A. Manufacturing cost
   B. Depreciation by sinking fund method
   C. Discrete compound interest
   D. Cash ratio

5. If an amount R is paid at the end of every year for ‘n’ years, then the net present value of the annuity at an interest rate of i is _________________?

   A. R [{(1 + i)n – 1}/ i ]
   B. R [{(1 + i)n – 1}/ i (1 + i)n]
   C. R(1 + i)n
   D. R/(1 + i)n

6. The total investment in a project is Rs. 10 lakhs and the annual profit is 1.5 lakhs. If the project life is 10 years, then the simple rate of return on investment is__________________?

   A. 15%
   B. 10%
   C. 1.5%
   D. 150%

7. Effective and nominal interest rates are equal, when the interest is compounded__________________?

   A. Annually
   B. Fortnightly
   C. Monthly
   D. Half-yearly

8. Nominal and effective interest rates are equal, when the interest is compounded______________?

   A. Quarterly
   B. Semi-annually
   C. Annually
   D. In no case, they are equal

9. A present sum of Rs. 100 at the end of one year, with half yearly rate of interest at 10%, will be Rs ?

   A. 121
   B. 110
   C. 97
   D. 91

10. A reactor having a salvage value of Rs. 10000 is estimated to have a service life of 10 years. The annual interest rate is 10%. The original cost of the reactor was Rs. 80000. The book value of the reactor after 5 years using sinking fund depreciation method will be Rs _____________?

    A. 40,096
    B. 43,196
    C. 53,196
    D. 60,196