__AFB Last Minute Revision__

Paper II

## 1. If a sum of money doubles itself in 8 years at simple interest, the rate percent per annum is :

Explanation:

Let sum = x then Simple Interest = x

Rate = (100 * x) / (x * 8) = 12.5

2. There was simple interest of Rs. 4016.25 on a principal amount at the rate of 9%p.a. in 5 years. Find the principal amount ?

S.I.=P*R*T/100

=>P=S.I.*100/R/T P = 4016.25*100/9/5

= 8925

3. By investing Rs. 1620 in 8% stock, Michael earns Rs. 135. The stock is then quoted at:

To earn Rs. 135, investment = Rs. 1620.

To earn Rs. 8, investment = Rs.

1620/135 x 8 = Rs. 96. Market value of Rs. 100 stock

= Rs. 96.

4. The compound interest on Rs. 30,000 at 7% per annum is Rs. 4347. The period (in years) is:

Amount = Rs. (30000 + 4347) = Rs. 34347.

Let the time be *n* years. Then

30000(1+7/100)^n = 34347

(107/100)^n = 34347/30000

(107/100)^n = 11449/10000

(107/100)^n = (107/100)^2

*n* = 2 years.

5. 10,000 invested for 5 years with simple annual interest of 10% would have a future value of :

FV = 10000(1+(0.10*5))

= 10000(1+0.50)

= 10000*1.5

= 15000

10,000 invested for 5 years at 10%, compounded annually

has a future value of :

FV = 10000(1+0.10)^5)

= 10000(1.10)^5

= 10000*1.61051

= 16105.10

*n*= 2 years.