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Quizzes (15) Questions (85)

Questions Related to banking

Multiple choice maturity value of recurring deposits banking maths

Sneha deposits Rs. $2500$ per month in a bank for $48$ months under a recurring deposit scheme. If she is entitled to get Rs. $150000$ as maturity value, find the rate of interest per annum.

  1. $6\%$
  2. $8\%$
  3. $10\%$
  4. $12\%$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Let the rate of interest per annum be $r\%$.
$P =$ Rs. $2500, n = 48$ months
Interest $=$ $\dfrac{Pn(n+1)r}{2400}=\dfrac{2500\times48(48+1)r}{2400}= 2540r$
Maturity amount $ = 2500 \times 48 + 2450r = 120000 + 2450r$
$\Rightarrow 150000 - 120000 = 2450r$
$\Rightarrow 30000 = 2450r$
$\Rightarrow r = 12.24\%$

Multiple choice maturity value of recurring deposits banking maths

In which account, a depositor choses a fixed amount and deposits it for fixed period every month?

  1. saving account

  2. fixed account

  3. recurring deposit account

  4. current account
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In recurring deposit account, a depositor chooses a fixed amount and deposits it for fixed period every month.

Multiple choice maturity value of recurring deposits banking maths

John deposited Rs. $50000$ in a bank for $1$ year and paying an annual interest rate of $14\%$, compounded quarterly. What is the maturity amount?

  1. Rs $54548$
  2. Rs $48884$
  3. Rs $84448$
  4. Rs $44888$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Given, principal Amount $(P)$ $=$ Rs. $50000$  
Rate of Interest Amount $(r)$ $= 14\% = 0.14  $
Number of Period $(t)$ $= 1$ year  
Compounded Interest $(n)$ $= 4$ (quarterly)
Maturity value $=$ $P\times \left (1+\dfrac{r}{n}\right)^{nt}$
$=$ $50000\times \left (1+\dfrac{0.14}{1}\right)^{4}$
$=$ Rs. $84448$

Multiple choice maturity value of recurring deposits banking maths

If the account statement states that the interest is compounded annually then n = ?

  1. $1$
  2. $2$
  3. $3$
  4. $4$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

$A=P(1+\cfrac{r}{100})^n$

Here $n=$ no. of interest periods
If interest is compounded annually
$\implies$ no. of interest period $1\times 1=1$
$\implies n=1$

Multiple choice maturity value of recurring deposits banking maths

The maturity value of a R.D Account is Rs. $16,176$. If the monthly installment is Rs. $400$ and the rate of interest is $8$ $\%$. Find the time period of this R.D account.

  1. $2$ years
  2. $3$ years
  3. $4$ years

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

It is given that

Maturity values $=$ Rs. $16,176$
Monthly installment $=$ Rs. $400$
Rate of interest $=8\%$

Let the time be $x$ months
$\therefore$ Qualifying amount $=\dfrac {400\times (x\times x+1)}{2}=200(x^2+x)$

Now, S.I. $=\dfrac {200(x^2+x)\times 8\times 1}{100\times 12}=\dfrac {2(x^2+x)\times 2}{3}=\dfrac {4}{3}(x^2+x)$

Also, Principal $=$ Rs. $400\times x$

Therefore, $ 400x+\dfrac {4}{3}(x^2+x)=16176$

$\Rightarrow 1200x+4x^2+4x=48528$

$\Rightarrow 4x^2+1204x-48528=0$

$\Rightarrow x^2+301x-12132=0$

$\Rightarrow (x-36)(x+337)=0$

$\Rightarrow x=36$ or $x=-337$

Since the time cannot be negative, we have $x=36$.

The time of RD account is $36$ months or $3$ years.

Multiple choice maturity value of recurring deposits banking maths

A man deposited a certain amount in a bank that would repay double the amount after a year. At the
beginning of the second year, the man took out Rs 8000 and deposited the rest in the same bank. Again at the beginning of the third year, he took out Rs 8000 and deposited the rest in the same bank. At the beginning  of the fourth year, he took out Rs 8000 as before but was not left with any balance in the bank. What was  his initial deposit?

  1. Rs 6000

  2. Rs 9000

  3. Rs 8000

  4. Rs 7000
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

$Let\quad the\quad initial\quad deposit\quad be\quad Rs.\quad x,\ amount\quad after\quad 1st\quad year=Rs.\quad 2x\ amount\quad left\quad after\quad withdrawl=Rs.\quad 2x-8000,\ amount\quad after\quad 2nd\quad year=Rs.\quad 4x-16000\ amonut\quad left\quad after\quad withdrawl=Rs.\quad 4x-24000,\ amount\quad after\quad 3rd\quad year=Rs.\quad 8x-48000=Rs.\quad 8000,\ 8x=56000,\ x=Rs.\quad 7000$

Multiple choice maturity value of recurring deposits banking maths

The fixed period of recurring deposit account can be 

  1. $2$ months
  2. $3$ months
  3. $6$ months

  4. All of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The fixed period of recurring deposit  account can be $6$ months or more.

Therefore, options C is the correct answer.

Multiple choice maturity value of recurring deposits banking maths

Kiran deposited Rs.$200$ per month for $36$ months in a bank's recurring deposit account. If the bank pays interest at the rate of $11$ $\%$ per annum, find the amount she gets on maturity.

  1. Rs.$8412$
  2. Rs.$8421$
  3. Rs.$2481$
  4. Rs.$1234$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let the monthly installment be $P$.

Given, $P=200$, $n=36$, $r=11\%$
Interest $=\dfrac {Pn(n+1)r}{2400}$$=\dfrac {200\times 36 \times 37\times 11}{2400}$$=1221$
We know, maturity amount $=(Pn+1221)$$=(200\times 36+1221)$$=$ Rs. $8421$

Multiple choice investement and financial planning banking compound interest comparing quantity maths

Investment in funds like ELSS are admissible for deduction under section $80\text{C}$ of income tax.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Investments in Equity Linked Saving Schemes or ELSS qualify for tax deduction under Section $80C$ of the Income Tax Act. The maximum tax deduction allowed under Section $80C$ is Rs 1.5 lakh under Section $80C$.

Multiple choice investement and financial planning banking compound interest comparing quantity maths

You invest Rs. $3,000$ in a two year investment that pays you $12\%$ p.a. Calculate the future value of the investment.

  1. Rs. $3,367.20$
  2. Rs. $3,673.20$
  3. Rs. $3,763.20$
  4. Rs. $3,736.20$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

$F=C.F. (1+i)^n$
Where, $F=$ Future value
$C.F. =$ Cash flow $=$Rs. $3,000$
$i=$ rate of interest $=0.12$
$n=$ time period $=2$
$F=$Rs. $3,000(1+0.12)^2$
$=$Rs. $3,000\times 1.2544$
$=$Rs. $3,763.20$