__AFB Last Minute Revision__

Paper IX

Paper IX

S.I. = P×R×T100

So, by putting the values in the above formula, we get

S.I. = 7000×50/3*9/12/100

=875

[Please note that we have divided by 12 as we converted 9 months in a year format]

2. Find the simple interest on the Rs. 2000 at 25/4% per annum for the period from 4th Feb 2013 to 18th April 2013 One thing which is tricky in this question is to calculate the number of days.

Always remember that the day on which money is deposited is not counted while the day on which money is withdrawn is counted.

So let’s calculate the number of days now, Time = (24+31+18) days

= 73/365 years

= 1/5 years P = 2000

R = 25/4% S.I. = 2000*25/4/5/100

= 25

3. Effective annual rate of interest corresponding to nominal rate of 6% per annum compounded half yearly will be :

Let the amount Rs 100 for 1 year when compounded half yearly, n = 2, Rate = 6/2 = 3%

Amount=100(1+3100)2=106.09

Effective rate = (106.09 - 100)% = 6.09%

4. A sum of money invested at compound interest to Rs. 800 in 3 years and to Rs 840 in 4 years. The rate on interest per annum is. :

S.I. on Rs 800 for 1 year = 40

Rate = (100*40)/(800*1) = 5%