1. Q1 – In the formula , Interest = Principal X Rate X Time, Interest is _____ and principal is _____ ?
Total interest, initial amount borrowed or lent
Rate of interest, Total amount payable
Interest per annum, Amount which is principally agreed to be paid
Minimum interest, Total amount payable
None of the above

2. Q2- In the formula , Interest = Principal X Rate X Time, Rate is _____ and Time is ______ ?
Bank rate of interest, One year period of time
Rate percentage of interest per annum, period expressed in year which some amount is borrowed or lent
Market rate per annum, Periodicity of interest charging
Market rate of interest, Initial period fixed for repayment
None of the above

3. Q3 A purchased a scooter by obtaining a loan of Rs at the rate of 15% simple interest p.a. How much interest in total will pay if the loan is taken for 3 years ?
Rs 4500
Rs 10,500
Rs 12500
Rs 13500
Rs 15000

4. Q 4 - Installment is ?
Fixed amount, that is to be repaid regularly in a specified period
Fixed amount, that is repaid at will of the borrower during any period
Fixed amount of interest repaid by the borrower during any specified period
Fixed amount of repayment of the principal amount only
None of the above

5. Q 5 - Amount is ______ whereas principal is ___ ?
Present Value, Future Value
Past value, present value
Future value, present value
Present value, past value
None of the above

6. Q6 – Which of the following is true ?
Amount = (Principal + Interest) or (A=P + I)
Amount = (Principal + Principal X Rate X Time ) or ( A = P + Prt)
Amount + { Principal(1 + Rate X Time) } or { A = P (1 + rt ) }
Interest (Amount – Principal) or I = (A-P)
Interest = ( Future Value – Present Value) or I = (FV – PV)
All of the above

7. Q 7 – Which of the followings are true ?
P = I/RT
R = I/PT
T = I/PR
A + P(1 + rt)
I = A – P
All of the above

8. Q – 8 A deposit matures to Rs 24,200 after 3 years at simple interest of 7% per annum. What is the principal amount of the deposit ?
12000
15000
20000
18000
16000

9. Q 9 - What is the formula for charging compound interest with annual compounding ?
A = P(1 + r)ⁿ
A = Prt
A = Prt + P(1 + r)
None of the above
All of the above

10. Q 10 - Ramesh has deposited Rs 10000 for 3 years
Q 10 - Ramesh has deposited Rs for 3 years. The interest is compounded annually at 10%. What will be the amount receivable by Ramesh at the end of the 3 years period ?
13000
12000
13110
13310
13130

11. Q 11 – In the previous question , (1+ r)3 becomes (1 + 10/100) 3 = ( ) 3 = ( 1.10) How is the figure calculated ?
By manual calculation, as ( 1.10 )3 = 1.10 X 1.10 X 1.10
Using calculator
Using MS Excel and applying ^ function ( exponential function) ie (1.10 )3 = ( 1 .10)^ 3
Using future value chart, where value of an amount for different periods and for different interest rate is given
All of the above

12. Q 12 - In the terms Present value or Future value , the term value is also known as:
Principal
Investment
Cash flow
None of these
All of a & b & c

13. Q 13 – The relationship between Present Value and Future Value ( for single cash flow ) is :
FVn = PV (1 + r )n
PV = FVn / ( 1 + r )ⁿ
PV = FVn X ( 1 + r )-n
All of these
None of these

14. Q 14 – If you want to receive Rs at the end of 10 years, how much have you to invest today, considering the interest rate is 10% p.a ( yearly compounding) ?
20000
15440
14878
19253
14325

15. Q 15 -Vinod is investing Rs 1500 every year for the next three 10% per annum. How much amount will he be getting at the end of three years ?
3150
4580
4965
5461
4357

16. Q -16 Vinod is investing Rs 1500 every year for the next three 10% per annum. What is the present value of the amount he is going to get at the end of three years
3150
4580
3730
5125
3530

17. Q Vinod is investing Rs 1500 every year at the beginning of the year for the next three 10% per annum. How much amount he is going to get at the end of three years
4965.5
5461.5
4567.2
5460
3437.6

18. Q 18 – Rajan wants to take a loan of Rs 30000 for purchasing a fridge
Q 18 – Rajan wants to take a loan of Rs for purchasing a fridge. The rate of interest on loan per annum is 8%. If Rajan wants to pay back the money along with interest in four equal yearly installments what should the yearly installment
Rs 7500
Rs 9058
Rs 8036
Rs 9435
Rs 8000

19. Q – 19 Ranjan wants to receive Rs every year for 15 years by investing in an annuity when the interest rate is 8%, the amount he needs to invest in annuity is
Rs 1,25,000
Rs 1,25,392
Rs 1,28,000
Rs 1,28,392
Rs 1,27,392

20. Q - 20. Ajay has borrowed a sum of Rs 40000 repayable in 10 years
Q Ajay has borrowed a sum of Rs repayable in 10 years. What monthly repayment Ajay has to make at 15% interest compounded monthly.
Rs 545
Rs 500
Rs 783
Rs 645
Rs 610

21. Q A firm is planning to purchase a machinery worth Rs after 4 years. They have planned to make savings right from this year. Calculate the yearly savings, they are required to make to purchase the machinery if the return on investment is 12% .
10321
10462
12000
12163
10000

22. Q -22 Coupon rate is : Market rate of return of a debenture
The rate at which a bond is purchased
The total amount which one gets on maturity of debenture
Specific rate of interest at which a bond is issued
None of the above

23. Q 23 - The value of bond is Face value
Present value of cash flows in future
Market price
Issue price
None of the above

24. Q 24 – When the expected rate of interest is lower than the coupon rate a bond may be issued
At par
At discount
At premium
At any rate
None of these

25. Q 25 – Zero coupon bonds :
Do not carry any interest. It is issued at a lower price than its redemption value
Carry a fixed rate of interest payable at the time of redemption of the bond
Bears zero risk
All of the above
None of the above

26. Q 26 – Internal rate of return (IRR) is the rate of ___ in NPV equation at which the present value of cash flows of a project equals its initial outlay
Cash flow
Investment
Discount
Year
None of these

27. Q 27 – For a project the difference between the sum of the present value of cash flows of the project and the cash outlays for financing the project is its:
Future value
Internal rate of return
Net present Value
Cash outflow
None of these

28. Q 28– IRR is the value of the discount rate at which the NPV of a project is :
More than zero
Less than Zero
Equal to zero
Double of zero
None of these

29. Q 29 – If the total of the present value is less than the cash outlay of a project, then the project is :
Viable
Not viable
At no risk
Nothing can be concluded
Extremely viable

30. Q 30 – A project should be undertaken if its IRR is :
Less than the cost of capital
More than the cost of capital
Half of the cost of capital
No relevance
None of the above