Tag: business and commercial activities

Questions Related to business and commercial activities

What annual instalment will discharge a debt of Rs. $2710$ due in $4$ years at $7\%$ simple interest?

installments banking business and commercial activities economics maths

  1. Rs. $1000$

  2. Rs. $613$

  3. Rs. $225$

  4. Rs. $150$

Show answer
Correct Option: B
Explanation:

Let the annual installment be $x$

Now, $ x$ accumulates an interest of $7.1$ every year
$\implies$
$x$ deposited in first year becomes $1.21x$ in next $3$ years
$x$ deposited in second year becomes $1.11x$ in next $2$ years
$x$ deposited in first year becomes $1.07x$ in next $4$ years
$\implies1.21x+1.41x+1.07x+x=2710\ \implies 4.92x=2710\ \implies x=Rs.613$

Under the __________ scheme, the article will not be owned by the buyer until and unless he/she has paid the complete purchasing price of the article.

installments banking business and commercial activities economics maths

  1. Interest

  2. Hire Purchase

  3. Loan

  4. Finance

Show answer
Correct Option: B
Explanation:

$\Rightarrow$  Under the $Hire\, Purchase$ scheme, the article will not be owned by the buyer until and unless he\she has paid the complete purchasing price of the article.

$\Rightarrow$  Hire-purchase system is a special system of purchase and sale. When goods are purchased on hire purchase system, the purchaser pays the price in instalments, these instalments may be Monthly, Quarterly or yearly etc. 
$\Rightarrow$   Goods are delivered to the purchaser at the time of Hire Purchase Agreement but the purchaser will become the owner of goods only on payment of last instalments.
$\Rightarrow$  All instalments paid are treated a hire until the last instalment paid off.

What is hire purchase scheme?

installments banking business and commercial activities economics maths

  1. A method of buying goods through making instalment payments over time.

  2. A method of trading goods through making instalment payments over time.

  3. A method of buying goods through making interest payments over time.

  4. A method of buying goods through making money payments over time.

Show answer
Correct Option: A
Explanation:

A hire purchase is a method of buying goods through making instalment payments over time.

The interest scheme in which companies reduce the amount of the instalments to promote sales is called as __________.

installments banking business and commercial activities economics maths

  1. Discount Sale

  2. $100\%$ Finance

  3. $0\%$ Interest

  4. $50\%$ Finance

Show answer
Correct Option: A
Explanation:

$\Rightarrow$  The interest scheme in which companies reduce the amount of the installments to promote sales is called as $Discount\,Sale.$

$\Rightarrow$  Discounts  are reductions to a basic price of goods or services.
$\Rightarrow$  The purpose of discount sale is to increase short-term sales, to move out-of-date stock, to reward valuable customers, to encourage distribution channel members to perform a function, or to otherwise reward behaviors that benefit the discount issuer.

The instalment scheme in which companies take $4$ or $5$ instalments in advance is called as:

installments banking business and commercial activities economics maths

  1. $25\%$ Finance

  2. $75\%$ Finance

  3. $100\%$ Finance

  4. $0\%$ Interest

Show answer
Correct Option: D
Explanation:

The installment scheme in which companies take $4$ or $5$ installment in advance is called as : $0\%$ Interest

For $0$ percent loans, you pay no interest. That means you're borrowing money from a bank but paying no fee for the privilege of doing so. Essentially, $0$ percent interest gives you the chance to pay the same amount of money as a cash buyer, even though you're spreading your payments over a longer term.
It is the total cost of the article paid as loan to the buyer.
The interest collect $3-5$ months installments in advance.

A man buys an iPhone $6$ for Rs. $53{,}000$. He realizes that he cannot pay such a large amount of money right now, so he decides to pay Rs. $4{,}505$ monthly for $12$ months. This amount of Rs. $4{,}505$ is called as:

installments banking business and commercial activities economics maths

  1. Simple Interest

  2. Selling Price

  3. Principal Amount

  4. Instalment

Show answer
Correct Option: D
Explanation:

$\Rightarrow$  A man buys an iPhone $6$ for $Rs.53,000.$ He realize the he cannot pay such a large amount of money right now, so he decides to pay $Rs.4,505$ monthly for $12$ months. This amount of $Rs.4,505$ is called as : $Installment.$

$\Rightarrow$  The monthly or period payment in installment purchase is termed as installment.
$\Rightarrow$   In the case of installment purchase, the purchase happens as soon as the agreement between the buyer and financing Difference between Hire Purchase vs. Installment Purchase company is entered into.
$\Rightarrow$  In installment purchase, purchase and ownership take place before the complete payment.

A certain number of tennis balls were purchased for Rs 450. Five more balls could have been purchased in the same amount if each ball cheaper by Rs 15. The number of ball purchased was __________

installments banking business and commercial activities economics maths

  1. 10

  2. 15

  3. 20

  4. 25

Show answer
Correct Option: A
Explanation:

Let's take number of ball purchased=x  for Rs 450.
As per question, 
$\frac { 450 }{ x }=\frac { (450) }{ x+5 }+15 $
$\frac { 30 }{ x } =\frac { 30 }{ x+5 } +1$
$30x+{ x }^{ 2 }+5x=30x+150$
${ x }^{ 2 }+15x-150=0$
${ x }^{ 2 }+15x-10x-150=0$
${ x }(x+15)-10(x+15)=0$
$(x-10)(x+15)=0$
So, x=10, and x=-15(not possible)
Answer (A) 10

_________ allows a customer to buy a product by paying only a part of the cash price, and the remaining amount can be paid in instalments.

installments banking business and commercial activities economics maths

  1. Instalment scheme

  2. hire purchase scheme

  3. loan scheme

  4. cash scheme

Show answer
Correct Option: A
Explanation:

Instalment scheme allows customers to pay a sum of money in small parts in a fixed period of time. A part of the amount of product is paid at the time of purchase and rest is paid in regular periodic instalments.

Which of the following does not give a difference between a hire purchase and a normal purchase?

installments banking business and commercial activities economics maths

  1. Timing of payment for asset.

  2. Quality of asset purchased.

  3. Legal ownership of asset.

  4. Total cost of asset.

Show answer
Correct Option: B
Explanation:

Quality of asset purchased does not give a difference between a hire purchase and a nominal purchase

Under hire purchase system who has the right of sell

installments banking business and commercial activities economics maths

  1. hirer

  2. buyer

  3. debtor

  4. hire vendor

Show answer
Correct Option: D
Explanation:

Hire vendor has the right of sell under hire purchase system.