Tag: banking

Questions Related to banking

What is the name of the seller under hire purchase system?

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 is the name of the seller under wire purchase system.

In which system purchaser agrees to pay for goods like a instalments?

installments banking business and commercial activities economics maths

  1. cash system

  2. instalment system

  3. hire purchase system

  4. credit system

Show answer
Correct Option: C
Explanation:

In hire purchase system, purchaser agrees to pay for goods like a installments.

What is the name of the buyer under hire purchase system?

installments banking business and commercial activities economics maths

  1. hirer

  2. buyer

  3. debtor

  4. hire vendor

Show answer
Correct Option: A
Explanation:

Hirer is the name of the buyer under hire purchase system.

The depreciation on an asset purchased through hire purchase should be:

installments banking business and commercial activities economics maths

  1. Based on the total cost including interest

  2. Based on the cost price of the asset only

  3. Should be straight line only

  4. No depreciation should be provide until the final payment is made

Show answer
Correct Option: B
Explanation:

The depreciation on an asset purchased through hire purchase should be based on the cost price of the asset only.

When does the asset legally belong to the purchaser under a hire purchase agreement?

installments banking business and commercial activities economics maths

  1. Final instalment is paid and purchaser agrees to a legal option to buy the asset

  2. Purchaser agrees to legal option to buy the asset

  3. Final instalment is paid

  4. On date of first instalment in repayment

Show answer
Correct Option: A
Explanation:

When, final installment is paid and purchased agrees to a legal option to but the asset, then the asset legally belong to the purchaser under a high purchase agreement.

In hire purchase, ownership of the property is transferred to the hirer on the payment of the ______ instalment.

installments banking business and commercial activities economics maths

  1. first

  2. second

  3. third

  4. last

Show answer
Correct Option: D
Explanation:

In hire purchase, ownership of the property is transferred to the hire on the payment of the last installment 

On the balance sheet of a company, the value of the asset bought through hire purchase will appear as:

installments banking business and commercial activities economics maths

  1. Cost less depreciation to date less amount owing on hire purchase less interest owing

  2. Cost less amounts owing on hire purchase

  3. Cost less depreciation to date less amount owing on hire purchase

  4. Cost less depreciation to date

Show answer
Correct Option: D
Explanation:

The value of the asset bought through hire purchase will appear as cost less depreciation to date on the balance sheet of a company.

A option to buy a thing an agreement of hiring is called

installments banking business and commercial activities economics maths

  1. cash system

  2. instalment system

  3. hire purchase system

  4. credit system

Show answer
Correct Option: C
Explanation:

A option to buy a thing an agreement of hiring is called hire purchase system.

The company offers a heater whose cost price is Rs. $9400$ at a monthly E.M.I for $24$ months. The interest charged is $6\%$. What is the monthly EMI to be paid by the customer?

installments banking business and commercial activities economics maths

  1. Rs. $340$

  2. Rs. $512$

  3. Rs. $439$

  4. Rs. $604$

Show answer
Correct Option: C
Explanation:

$\Rightarrow$   We know, $EMI=\dfrac{Cost\, price+Interest}{Months}$


$\Rightarrow$   $T=24\,months=2\,years,\, R=6\%\,$ and $P=Rs.9400$.


$\Rightarrow$   $Interest = \dfrac{P\times R\times T}{100}=\dfrac{9400\times 6\times 2}{100}$

$\Rightarrow$   $Interest = Rs.1128.$


$\Rightarrow$   $EMI=\dfrac{9400+1128}{24}=Rs.438.66\approx Rs.439.$

Following are the details for purchasing a mobile phone:
Selling Price $=$ Rs. $15,600$
Initial Payment $=25\%$
Rate of Interest $= 10\%$
Processing Fee $=2\%$
Period $=12$ months
Calculate the total amount (in Rs.) that will be paid by the customer for the mobile phone.

installments banking business and commercial activities economics maths

  1. $15600$

  2. $17082$

  3. $16390$

  4. $16770$

Show answer
Correct Option: B
Explanation:

$\Rightarrow$  Selling price of mobile phone is $Rs.15,600.$

$\Rightarrow$  Initial payment = $25\%\,\, of Rs.15,600.$
$\Rightarrow$  Initial payment = $\dfrac{25}{100}\times 15600=Rs.3900.$
$\Rightarrow$  Loan amount = Selling price - Initial payment.
$\Rightarrow$  Loan amount = $Rs.15,600-Rs.3,900=Rs.11,700.$

$\Rightarrow$  $Interest=\dfrac{11700\times 10\times 1}{100}=Rs.1170.$

$\Rightarrow$  Processing fee = $2\%\,\,of\,Rs.15600.$
$\Rightarrow$  Processing fee = $\dfrac{2}{100}\times 15600=Rs.312.$
$\Rightarrow$  Total amount paid = Selling price + Interest + Processing fee.
$\Rightarrow$  Toatal amount paid = $Rs.15600+Rs.1170+Rs.312=Rs.17082.$