__AFB Last Minute Revision__

Paper VII

Paper VII

It will be,

SI on the rate B lends - SI on the rate B gets

Gain of B = 3500*11.5/100*3-3500*10/100*3

= 1207.50 - 1050

= 157.50

2. A person invested Rs. 1000000 in a bank FDR @ 12% p.a. for 1 year. If interest is compounded on quarterly basis, the amount payable shall be ......

P = 1000000

R = 12% / 4 = 0.03 (since compounding is quarterly, rate is divided by 4)

T = 1*4 = 4 (since compounding is quarterly, time is multiplied by 4) FV = P * (1+R)^T So,

FV = 1000000 * (1+0.03)^4

= 1125509

3. Ram borrows Rs. 5000 for 2 years at 4% p.a. simple interest. He immediately lends money to Rahul at 25/4% p.a. for 2 years. Find the gain of one year by Ram.

Two things need to give attention in this question, First we need to calculate gain for 1 year only.

Second, where we take money at some interest and lends at other, then we use to subtract each other to get result in this type of question. Lets solve this Simple Interest question now. Gain in 2 year = [(5000×254×2100)-(5000×4×2100)]

= (625-400)

= 225 So gain for 1 year = 225/2 = 112.50

4. If A lends Rs. 3500 to B at 10% p.a. and B lends the same sum to C at 11.5% p.a., then the gain of B (in Rs.) in a period of 3 years is … We need to calculate the profit of B.

It will be,

SI on the rate B lends - SI on the rate B gets

Gain of B = 3500*11.5/100*3-3500*10/100*3

= 1207.50 - 1050

= 157.50

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