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An investor invested ₹ 5 lakhs in Company Q in 1996. After one year, the entire amount along with the interest was transferred as investment to Company P in 1997 for one year. What amount will be received from Company P, by the investor? |
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Answer: Option B Explanation: Amount received from Company Q after one year on investment of ₹ 5 lakhs in the year 1996 = ₹ [5 + (6.5% of 5)] lakhs =₹ 5.325 lakhs. Amount received from Company P after one year on investment of ₹ 5.325 lakhs in the year 1997 = ₹ [5.325 + (9% of 5.325)] lakhs = ₹ 5.80425 lakhs = ₹ 5,80,425. |
Two different finance companies declare fixed annual rate of interest on the amounts invested with them by investors. The rate of interest offered by these companies may differ from year to year depending on the variation in the economy of the country and the banks rate of interest. The annual rate of interest offered by the two Companies P and Q over the years are shown by the line graph provided below.
Annual Rate of Interest Offered by Two Finance Companies Over the Years.
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