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- Question
$10,000 face value strip bond has 15 years remaining until maturity. If the prevailing market rate of return is 6.5% compounded semiannually, what is the fair market value of the strip bond?
Options- A. 1710.29
- B. 2710.29
- C. 3710.29
- D. 4710.29
- Correct Answer
- 3710.29
Explanationi=j/m
n =m(Term) = 2(15.5) =31
Fair market value Present value of the face value
=FV(1+ i)^-n
- 1. If you deposit $8000 into an account paying 7% annual interest compounded quarterly, how long until there is $12400 in the account?
Options- A. 2.3
- B. 3.3
- C. 4.3
- D. 6.3 Discuss
- 2. What would be the least number of years in which the simple interest on Rs.2600 at % will be an exact number of rupees ?
Options- A. 2
- B. 3
- C. 4
- D. 5 Discuss
- 3. What is the least number of complete years in which a sum of money put out at 40% annual compound interest will be more than trebled?
Options- A. 3
- B. 4
- C. 5
- D. 6 Discuss
- 4. An article costs Rs 50 presently. The rate of inflation is 300%. What will be cost of this article after two years?
Options- A. Rs 200
- B. Rs 600
- C. Rs 800
- D. Rs 1000 Discuss
- 5. Albert invested Rs. 8000 in a scheme for 2 years at compound interest rate 5% p.a. How much amount will Albert get on maturity of the fixed deposit ?
Options- A. Rs. 8840
- B. Rs. 8800
- C. Rs. 8810
- D. None Discuss
- 6. A five-year promissory note with a face value of $3500, bearing interest at 11% compounded semiannually, was sold 21 months after its issue date to yield the buyer 10% compounded quarterly.What amount was paid for the note
Options- A. 4336.93
- B. 5336
- C. 6336
- D. 7336 Discuss
- 7. There is 50% increase in an amount in 5 years at simple interest. What will be the compound interest of Rs. 12,000 after 3 years at the same rate ?
Options- A. Rs. 5422
- B. Rs. 5489
- C. Rs. 3972
- D. Rs. 6145 Discuss
- 8. Compound interest earned on a sum for the second and the third years are Rs.1200 and Rs.1440 respectively. Find the rate of interest ?
Options- A. 20% p.a
- B. 15% p.a
- C. 18% p.a
- D. 24% p.a Discuss
- 9. The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 12% per annum is Rs 900. What is the value of given sum (in Rs)?
Options- A. 125000
- B. 250000
- C. 62500
- D. 187500 Discuss
- 10. At what rate of compound interest per annum will a sum of Rs 20000 become Rs 23328 in 2 years?
Options- A. 8 percent
- B. 16 percent
- C. 24 percent
- D. 12 percent Discuss
Compound Interest problems
Search Results
Correct Answer: 6.3
Explanation:
FV=P(1+r/n)^nt
Correct Answer: 3
Explanation:
t=3
Correct Answer: 4
Correct Answer: Rs 800
Explanation:
Correct Answer: None
Explanation:
Amount =
= 8000 x 21/20 x 21/20
= Rs. 8820
Correct Answer: 4336.93
Explanation:
i=j/m
Maturity value = PV(1 + i)^n
Term = 5 years - 21 months= 3.25 years
Price paid = FV(1+ i )^-n
Correct Answer: Rs. 3972
Explanation:
Let p = Rs. 100.
Then, S.I is Rs. 50 and time = 5 years.
= 10% p.a.
Now, p = Rs. 12,000 , T = 3 years and R = 10% p.a.
C.I. = Rs.
= Rs. 3972
Correct Answer: 20% p.a
Explanation:
Rs.1440 - 1200 = Rs.240 is the interest on Rs.1200 for one year.
Rate of interest = (100 x 240) / (1200) = 20% p.a
Correct Answer: 62500
Correct Answer: 8 percent
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