The effective annual rate for 10% per annum compounded quarterly is: MCQ with Answer and Explanation
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Question #1
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The effective annual rate for 9% per annum compounded half-yearly is:
Correct Answer: Option D
Explanation:
Half-yearly rate 4.5%, (1.045)² = 1.092025, effective = 9.2025% ≈ 9.20%.
Half-yearly rate 4.5%, (1.045)² = 1.092025, effective = 9.2025% ≈ 9.20%.
This question belongs to:
Maths
Compound Interest
Question #2
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In how many years will Rs. 2000 amount to Rs. 2420 at 10% per annum compound interest, compounded annually?
Correct Answer: Option D
Explanation:
Amount/Principal = 2420 / 2000 = 121 / 100 = (11 / 10)^2. Since the annual rate is 10%, expansion factor is 11/10. Therefore, time = 2 years.
Amount/Principal = 2420 / 2000 = 121 / 100 = (11 / 10)^2. Since the annual rate is 10%, expansion factor is 11/10. Therefore, time = 2 years.
This question belongs to:
Maths
Compound Interest
Question #3
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Find the compound interest on Rs. 10000 at 8% per annum for 1 year compounded quarterly.
Correct Answer: Option B
Explanation:
Quarterly rate = 2%, n = 4. A = 10000 × (1.02)⁴ = 10000 × 1.08243216 = 10824.3216, CI ≈ Rs. 824.32.
Quarterly rate = 2%, n = 4. A = 10000 × (1.02)⁴ = 10000 × 1.08243216 = 10824.3216, CI ≈ Rs. 824.32.
This question belongs to:
Maths
Compound Interest
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