Interest and Annuities

Maturity value = P(1 + r)^t = 8000(1.05)² = 8000 × 1.1025 = 8820. Therefore, Albert gets Rs. 8820 at maturity. Option C is correct.

At 20% compound interest, we need the smallest integer n where (1.20)^n > 2. Checking: n=1: 1.20, n=2: 1.44, n=3: 1.728, n=4: 2.0736. Since 2.0736 > 2, the answer is 4 years. Option B is correct.

The PMT (Payment) function calculates periodic payments needed to reach a future value. To save $60,000 in 18 years, PMT can determine the monthly savings amount required given an interest rate and time period.

The PMT function calculates the periodic payment needed to reach a future value (FV) or pay off a present value (PV). For savings goals, you'd use PMT with a target FV of $60,000, specifying the interest rate and number of periods (18 years × 12 months = 216 periods). PV represents current value, not future savings goals, and FV is the target amount, not the calculation function.

This SAS data step processes 3 observations. For each observation, the DO loop runs 3 times (year=1 to 3), adding 5000 to capital each iteration. Total: 3 observations × 3 iterations × 5000 = 45000. The year variable ends at 4 after the loop completes its final iteration.

The PMT function in Excel calculates the payment amount for a loan based on constant payments and a constant interest rate. It requires five parameters: rate, nper (number of periods), pv (present value/loan amount), and optionally fv (future value) and type (when payment is due). While option C mentions 'monthly payment,' option D provides the more complete and accurate description.

Absolute return is calculated as ((NAV ending - NAV beginning) / NAV beginning) × 100. Here: ((20 - 16) / 16) × 100 = (4 / 16) × 100 = 25%. This measures total percentage return without annualizing or considering time periods. Option C is the correct calculation.

When drawings are made on the 15th of every month, the first drawing is used for 11.5 months and the last for 0.5 months. The average period is (11.5 + 0.5) / 2 = 6 months. This is the standard formula for interest calculation on monthly drawings made mid-month.

The percentage change in NAV is calculated as ((Ending NAV - Beginning NAV) / Beginning NAV) × 100. Here: ((44 - 40) / 40) × 100 = (4/40) × 100 = 10%. The fund's NAV increased by 10% over the year.

RBI Relief Bonds were government savings bonds issued by the Reserve Bank of India. These bonds had a fixed maturity period of 5 years, which means investors would receive their principal amount back along with interest after 5 years from the date of investment. Options suggesting 6, 7, or 8 years are incorrect as they don't match the actual maturity period of these bonds.

Principal = SI * 100/R * T = 10200 * 100/30 * 2 = 17000

Time = SI * 100/P * R = 16500 * 100/5000 * 15 = 22 years

It is customarily followed that interest from the date of closing to its due date is written in Red Ink, hence called Red- Ink Interest.