0900-1-eco-1mark

A financial bank charges 1 percent per week on the loans. Assume there are exactly 52 weeks in a year. What is the effective annual interest rate?

• 22.55%
• 38.98%
• 67.77%
• 52%

0900-3-eco-1mark

You have deposited Rs. 1,500 in an account that promises to pay 8% compounded quarterly for the next five years. How much will you have in the account at the end?

• Rs. 1,598.33
• Rs. 2,020.92
• Rs. 2,228.59
• Rs. 2,203.99

0900-4-eco-1mark

An investment option is available with continuous compounding at 5% interest. If you invest Rs. 8,000 now, how much interest income will you earn if you cash out in 3.5 years?

• Rs. 1,172
• Rs. 1,400
• Rs. 1,490
• Rs. 1,530

0900-5-eco-1mark

Which of the following statements is TRUE? (Assume that the yearly cash flows are identical for both annuities and that the common interest rate is greater than zero.)

• The present value of an annuity due is greater than the present value of an ordinary annuity
• The present value of an ordinary annuity is greater than the present value of an annuity due
• The future value of an ordinary annuity is greater than the future value of an annuity due

0900-6-eco-1mark

Study the timeline and accompanying 5-period cash-flow pattern below.

The present value of the 5-period annuity shown above as of Point \(X\) is the present value of a 5-period ________, whereas the future value of the same annuity as of Point \(Y\) is the future value of a 5-period ___________.

• ordinary annuity, ordinary annuity.
• ordinary annuity, annuity due.
• annuity due, annuity due.
• annuity due, ordinary annuity.

0900-7-eco-1mark

If you take out a 4-year Rs. 8,000 car loan that calls for monthly payments at an annual percentage rate of 10%, compounded monthly, what is your monthly payment?

• Rs. 170.05
• Rs. 180.20
• Rs. 240.40
• Rs. 202.90

GATE-CH-2001-2-21-eco-2mark

An investment of Rs. 1000 is carrying an interest of 10% compounded quarterly. The value of the investment (in Rs.) at the end of five years will be

• \(1000(1+0.1/4)^{20}\)
• \(1000(1+0.1)^{20}\)
• \(1000(1+0.1/4)^5\)
• \(1000(1+0.1/2)^5\)

GATE-CH-2002-2-14-eco-2mark

If an amount \(A\) is paid at the end of every year for \(n\) years, then the net present value of the annuity at an interest rate of \(i\) is

• \(\displaystyle A\left[\frac{(1+i)^n-1}{i}\right]\)
• \(\displaystyle A\left[\frac{(1+i)^n-1}{i(1+i)^n}\right]\)
• \(\displaystyle A(1+i)^n\)
• \(\displaystyle \frac{A}{(1+i)^n}\)

GATE-CH-2003-26-eco-1mark

A series of equal payments (e.g., deposit or cost) made at equal intervals of time is known as

• perpetuity

• capital charge factor

• annuity

• future worth

0900-2-eco-1mark

What is the monthly interest rate (in %) equivalent to a quarterly interest rate of 2.5%?

• Answer

GATE-CH-1988-19-iii-eco-4mark

A bond matures after five years and has a maturity value of Rs. 1000. If the interest rate is 12%, what is the present worth (in Rs.) of the bond?

• Answer

GATE-CH-2014-43-eco-2mark

A cash flow of Rs. 12,000 per year is received at the end of each year (uniform periodic payment) for 7 consecutive years. The rate of interest is 9% per year compounded annually. The present worth (in Rs.) of such cash flow at time zero is ______

• Answer

GATE-CH-2017-53-eco-2mark

A bond has a maturity value of Rs. 20,000 at the end of 4 years. The interest is compounded at the rate of 5% per year. The initial investment to be made, rounded to the nearest integer, is Rs. ________

• Answer

0900-11-eco-4mark

A lending company specifies a EMI (equated monthly installment) of Rs. 3515 for a loan amount of Rs. 100,000 which is to be paid in 3 years time. Calculate: (i) the interest rate per month, and, (ii) the effective annual interest rate. Loan amount is sanctioned at the start of the 3 year period. Repayment starts from the end of first month, and to continues still the end of 3 years (i.e., 36 installments).

(i) the interest rate per month (rounded to third decimal, in %)

{#1}

(ii) the effective annual interest rate (rounded to second decimal, in %)

{#2}

0900-13-eco-2mark

In year zero, you invest Rs. 10,000 in a 15% security for five years. During that time, the average annual inflation is 6%. How much, in terms of year zero dollars, will be in the account at maturity?

• Rs. 6653

• Rs. 13382

• Rs. 15030

• Rs. 15386

GATE-CH-PI-2008-32-eco-2mark

A man has deposited Rs. 1,000 per year for three years in a bank that paid him 5% interest compounded annually. At the end of three years, he had Rs. 3,153 in his account. How much more would he have earned if the bank had paid him 5% interest compounded continuously?

• Rs. 300
• Rs. 30
• Rs. 3
• Rs. 0.30

0900-10-eco-2mark

Calculate the maturity value (future worth) at the end of 4 years, for a periodic deposit of Rs. 1250 made at the start of every month, for 4 years. Interest rate is 10.5% per year, compounded quarterly.

• Answer

0900-12-eco-2mark

You plan to buy a car that has a total "drive-out" cost of Rs. 25,700. You will make a down payment of Rs. 3,598. The remainder of the car's cost will be financed over a period of 5 years. You will repay the loan by making equal monthly payments. Your quoted annual interest rate is 8% with monthly compounding of interest. (The first payment will be due one month after the purchase date). What will your monthly payment be (in Rs.)?

• Answer