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13.	In what time will Rs.1000 become Rs.1331 at 10% per annum compounded annually?
	A.  2 years
	B.  3 years
	C.  4 years
	D.  7 years

Solution

Principal = Rs.1000; Amount = Rs.1331; Rate = Rs.10%p.a. Let the time be n years.Then [1000(1+10/100)Λn;] = 1331. = (1331/1000) = (11/10)³ Therefore n = 3 years.

14.	The effective annual rate of interest corresponding to a nominal rate of 6% per annum payable half yearly is
	A.  6.06%
	B.  6.07%
	C.  6.08%
	D.  6.09%

Solution

Amount of Rs.100 for 1 year when compounded half yearly = Rs.[100 x (1+3/100)2] = Rs. 106.09%. Effective rate = (106.09 - 100)% = Rs. 6.09%.

15.	What will be the difference between simple interest and compound interest @10% per annum on a sum of Rs. 1000 after 4 years?
	A.  Rs. 31
	B.  Rs. 32.10
	C.  Rs. 40.40
	D.  Rs. 64.10

Solution

S.I. =Rs(1000x10x4 / 100) = Rs.400. C.I. =Rs.[1000x(1x10/100)4-1000] = Rs. 464.10 ∴ Difference = Rs.(464.10 - 400) = Rs. 64.10