FINANCIAL MATHEMATICS

PRACTICE PROBLEMS (MCQs) – Financial Mathematics

Q.1. A person borrowed Rs. 500 at the rate of 5% per annum with simple interest. What amount will he pay to clear the debt after 4-
years?
(a) 500 (b) 400
(c) 300 (d) 600
Q.2. Person-A borrowed Rs. 5000 from Person-B at simple interest rate r. After 3-years Person-B got Rs. 300 more than what he had
given to Person-A. What is the value of r?
(a) 1% (b) 2%
(c) 3% (d) None
Q.3. Ali took a loan of Rs. 15000 for 3-years at simple interest. If the total interest paid is Rs. 2700, what is the rate of interest per
annum?
(a) 2% (b) 4%
(c) 6% (d) None
Q.4. How much should a person lend an amount at simple interest rate of 15% in order to have Rs. 784 at the end of 1.5 years?
(a) 640 (b) 620
(c) 600 (d) None
Q.5. Imran took a loan for 6-years at a rate of 5% p.a. with simple interest. If the total interest paid was Rs. 1230, then compute the
principal amount.
(a) 4000 (b) 4500
(c) 4200 (d) None
Q.6. Ghafoor took a loan at 10% p.a. with S.I. After 4 years, he returned Rs. 3500 as fully with interest. What is the principal amount
he had taken?
(a) 2025 (b) 2020
(c) 2000 (d) None
Q.7. Rs. 800 amounts to Rs. 920 in 3-years at S.I. If the interest rate is increased by 3%, then how much amount will be?
(a) 990 (b) 992
(c) 995 (d) None
Q.8. If Rs. 64 amount to Rs. 83.20 in 2 years, what will Rs. 86 amount to in 4 years at the same rate of simple interest?
(a) 138 (b) 135
(c) 136 (d) 137
Q.9. The simple interest on a sum of money at 5% is Rs. 48 for 4-years. The simple interest on the same amount for 5-years at 4%
will be?
(a) 50 (b) 45
(c) 55 (d) None
Q.10. A certain sum of money lent out at simple interest amounts to Rs. 690 in 3-years and Rs. 750 in 5-years. What is the sum of
amount which has to be lent?
(a) 400 (b) 500
(c) 600 (d) None
Q.11. A certain sum of money at simple interest amounts to Rs. 1012 in 2.5 years and to Rs. 1067.20 in 4-years. What is the rate of
interest p.a.?
(a) 1% (b) 2%
(c) 3% (d) 4%
Q.12. A sum of money at simple interest amounts to Rs. 2240 in 2-years and to Rs. 2600 in 5-years. What is the principal amount?
(a) 2025 (b) 2020
(c) 2000 (d) None
Q.13. For how many years should be required if Rs. 600 be invested at 10% p.a. in order to earn the same simple interest as is earned
by investing Rs. 800 at 12% per annum for 5-years?
(a) 8 (b) 6
(c) 5 (d) None
Q.14. The simple interest on a certain sum of money at the rate of 5% p.a. for 8 years is Rs. 840. At what rate of interest the same
amount of interest can be received on the same sum after 5 years?
(a) 5% (b) 8%
(c) 6% (d) None
Q.15. What is the value of simple interest on Rs. 10 for 4 month at the rate of 3 paisas per rupee per month?
(a) 1.50 (b) 1.30
(c) 1.20 (d) None
Q.16. A person takes a loan of Rs. 200 at 5% p.a. with S.I. He returns Rs. 100 at the end of first year. How much he would pay in order
to clear his dues at the end of second year?

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FINANCIAL MATHEMATICS
(a) 225.5 (b) 125.5
(c) 215.5 (d) 115.5
Q.17. A sum of money can be lent in two alternates: (i) At the rate of 11% p.a. for 3.5 years; (ii) At the 11% for 4.5 yers; If the
differences between their simple interests is Rs. 412.50, what is the sum of money?
(a) 3750 (b) 3850
(c) 3650 (d) None
Q.18. A took a certain amount as a loan from the bank at the rate of 8% p.a. with simple interest and gave the amount to B as a loan
at the rate of 12% p.a. What is the amount he taken from the bank if he received a profit of Rs. 320 in 12-years?
(a) 666.67 (b) 665.67
(c) 566.67 (d) None
Q.19. The difference between the interests received from the two different banks on Rs. 500 for 2-years is Rs. 2.50. What is the difference
between their interest rates?
(a) ¼% (b) 1/3%
(c) ½% (d) None
Q.20. What is the simple interest on Rs. 1820 from March 9, 2000 to May 21, 2000 at 7.5% p.a.?
(a) 20.25 (b) 20.20
(c) 27.00 (d) None
Q.21. In how many years will a sum of money double itself at 12% p.a. with simple interest?
(a) 8.55 (b) 8.44
(c) 8.33 (d) None
Q.22. If a sum of money is double itself in 8-years at simple interest, then what is the rate of interest in percent?
(a) 20.25 (b) 12.20
(c) 15.75 (d) None
Q.33. If a sum of money at simple interest doubles itself in 6-years, then how long it will take that the sum will become 4 times?
(a) 20 (b) 18
(c) 15 (d) None
Q.24. A sum of money becomes 8/5th times of itself in 5-years at simple interest at a certain rate of interest. What is the rate of interest?
(a) 20% (b) 15%
(c) 13% (d) 12%
Q.25. The rate of simple interest on a sum of money is 6% p.a. fir first 3 years, 8% p.a. for the next 5 years and 10% p.a. for the
remaining. If the total simple interest for a total period of 10 years is 1560, what is the sum?
(a) 2025 (b) 2020
(c) 2000 (d) None
Q.26. At what rate of percentage p.a. the simple interest, if Rs. 625 to Rs. 650 in 6-months?
(a) 5% (b) 7%
(c) 8% (d) None
Q.27. Ali’s father wishes to have Rs. 500000 in a bank account when his first college expenses begin. How much amount his father
should deposit now at 6.5% compounded annually if Ali is to start college in 9 years from now?
(a) 285100 (b) 284100
(c) 283100 (d) None
Q.28. First investment plan is 5% per year compounded quarterly and the second investment plan is 5.10% per year simple interest.
Which plan is better?(Hints: compute the effective interest rate of both plans)
(a) Ist investment (b) 2nd Investment
(c) Both (a) and (b) (d) None
Q.29. The bacteria in a culture grow by 10% in 1st hour, decrease by 8% in 2nd hour, again increase by 7% in 3rd hour. If at the end of
the 3rd hour, the total count of bacteria is 15170000 then find the number of bacteria in the initial hour?
(a) 14009456 (b) 1409456
(c) 140009456 (d) None
Q.30. A machine depreciates in value each year at 10% of its previous value and at the end of fourth year its value is 131220. Then
what is the original value of the machine?
(a) 250000 (b) 300000
(c) 350000 (d) None
Q.31. The simple interest of some amount is Rs. 4000 for two years while the compound interest is Rs. 4225. What is the rate of interest?
(a) 11% (b) 12%
(c) 13% (d) None
Q.32. If the compound interest for second year is Rs. 8800 and that for the third year is 9680, then what is the principal amount and
the rate of interest?
(a) 80000 & 11% (b) 70000 & 10%
(c) 80000 & 10% (d) None

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FINANCIAL MATHEMATICS
Q.33. If the 12% rate of interest is given compounded monthly then what is the rate of effective interest?
(a) 11% (b) 12%
(c) 11.5% (d) 12.7%
Q.34. A sum of money doubles itself at compound interest in 10 years. In how many years will it becomes eight times?
(a) 10 (b) 20
(c) 30 (d) None
Q.35. At what rate of compound interest does a sum of money becomes 4-times in 2-years?
(a) 50% (b) 100%
(c) 75% (d) None
Q.36. A man borrowed Rs. 5000 at 6% simple interest and invested the same amount at 6% compounded semi-annually. What would
he gain after 8.5 years?
(a) 715 (b) 715.25
(c) 714 (d) 714.25
Q.37. A man needs to borrow Rs. 30000 for two years. Which of the following loan is more advantageous to him? (i) 4.1% p.a. simple
interest, (ii) 4% p.a. compounded semi annually.
(a) option (i) (b) option (ii)
(c) option (i) and (ii) both (d) None
Q.38. Mr. A started to work in 1990 for a company which increases the employee’s salary 8% each year for the first 8-years and then
by 5% for the next 15-years. What salary will be reach in 2009 if he started from Rs. 18000?
(a) 56983 (b) 56984
(c) 56985 (d) None
Q.39. Ali deposited Rs. 24000 at 12% for 9 years. Find the amount of interest earned if interest is charged compounded (i) daily, ( ii)
hourly?
(a) 46659 & 46672 (b) 46660 & 46670
(c) 46650 & 46665 (d) None
Q.40. If the simple interest on a sum of money at 5% p.a. for 3 years is Rs. 1200, then what is the compound interest on the same
amount for same period at the same rate?
(a) 1260 (b) 1261
(c) 1262 (d) None
Q.41. What is the difference between the compound interests if interests are on Rs. 1600 for one year at 20% p.a. compounded half
yearly and compounded quarterly?
(a) 8.8 (b) 8.5
(c) 8.9 (d) None
Q.42. A sum of Rs. 1100 was taken as a loan. This is to be repaid into two equal installments. If the rate of interest 20% compounded
annually then what is the value of each installment?
(a) 700 (b) 720
(c) 750 (d) None
Q.43. The difference between the compound interest and the simple interest earned at the end of second year on the sum of money at
10% p.a. is Rs. 20. What is the value of sum?
(a) 5000 (b) 2000
(c) 7000 (d) None
Q.44. A tree increases annually by 1/8th of its height. By how much will it increase after two years, if its stands today 64cm high?
(a) 80cm (b) 81cm
(c) 83cm (d) None
Q.45. What is the compound interest on Rs. 20480 at 6.25% p.a. for 2years and 73 days?
(a) 2828 (b) 2929
(c) 2727 (d) None
Q.46. A shopkeeper sold goods worth Rs. 3 millions during 2008. If he is able to increase his sale by 15% p.a. then determine the year
in which he would achieve annual sale of Rs. 25 millions?
(a) 2025 (b) 2020
(c) 2000 (d) None
Q.47. What will be the value of Rs. 450 compounded at 12% for 3-years?
(a) Rs. 500 (b) Rs. 632
(c) Rs. 545 (d) Rs. 600
Q.48. A principal amount accrues to Rs. 8500 if it is compounded at 14.5% over 6-years. What is the value of this original amount?
(a) Rs. 3775 (b) Rs. 3770
(c) Rs. 3778 (d) None
Q.49. What is the interest rate necessary for Rs. 20000 to accrue to Rs. 50000 in 12 years?
(a) 2% (b) 4%

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FINANCIAL MATHEMATICS
(c) 6% (d) 8%
Q.50. A firm plans to invest an amount of money at the beginning of every year in order to accrue a sum of Rs. 100000 at the end of 5-
years periods. What is the value of the amount if the investment rate is 14%?(HINTS; Money is invested as series of equal payment
and not as a single amount)
(a) Rs. 13272.35 (b) Rs. 13270.52
(c) 13275.00 (d) None
Q.51. An amount of Rs. 100 is subject to interest at 12% compounded quarterly. What is the accrued amount?
(a) Rs. 112 (b) Rs. 110
(c) Rs. 115 (d) Rs. 120
Q.52. A financial company advertises money at 22% nominal interest, but compounds monthly. What is the value of APR? (APR= Actual
Percentage Rate or Effective Interest Rate)
(a) 25% (b) 24%
(c) 27% (d) 28%
Q.53. What is the value of APR of 10% nominal compounded quarterly?
(a) 10.48% (b) 10.38%
(c) 11.38% (d) None
Q.54. What is the value of effective interest rate if nominal interest rate is 24% compounded monthly?
(a) 26.82% (b) 27.50%
(c) 24.88% (d) 25.88%
Q.55. A company will have to spend Rs. 300000 on a new plant in two years from now. Currently investment rates are at a nominal
10%. What single amount should now be invested if compounding is six-monthly?
(a) Rs. 246810.75 (b) Rs. 300000
(c) Rs. 376545.35 (d) None
Q.56. What is APR in above problem Q.55?
(a) 5% (b) 10%
(c) 10.50% (d) 10.25%
Q.57. A main frame computer whose cost is Rs. 220000 will depreciate to scrape value of Rs. 12000 in 5-years. What is the depreciation
rate?
(a) 44.22% (b) 55.11%
(c) 44.11% (d) None
Q.58. What is the book-value of the computer at the end of the third year in above problem Q. 57?
(a) Rs. 48308 (b) Rs. 38408
(c) Rs. 39409 (d) None
Q.59. A departmental store advertises the goods at Rs. 700 deposits and three further equal payments of Rs. 500. If the discounting
rate is 7.5%, compute the present value of the goods?
(a) Rs. 2000.25 (b) Rs. 2000.75
(c) Rs. 2000.85 (d) None
Q.60. What is the value of IRR (Internal Rate of Return) for a project whose NPVs (Net Present Values) corresponding to each of the two
discounting rates 6% and 9% are Rs. 5596 and Rs. -2012.5 respectively?
(a) 8.21% (b) 8.00%
(c) 9.50% (d) None
Q.61. What is the IRR for the project whose NPV1 = 14000, NPV2 = -7000, I1 = 0.15 and I2 = 0.17?
(a) 0.16 (b) 0.13
(c) 0.15 (d) 0.14
Q.62. For the efficiency of two machines Machine-A has I1 = 22, N1 = 3045, I2 = 28, N2 = -1801.45 and Machine-B has I1 = 22, N1 =
4378.60, I2 = 28, N2 = -1604.75, which one is the machine for best choice?
(a) Machine-A (b) Machine-B
(c) Machine-A and B both (d) None
Q.63. A sum of money can be lent in two alternates: (i) At the rate of 11% p.a. for 3.5 years; (ii) At the 11% for 4.5 years; If the
differences between their simple interests is Rs. 412.50, what is the sum of money?
(a) 3750 (b) 3850
(c) 3650 (d) None
Q.64. A took a certain amount as a loan from the bank at the rate of 8% p.a. with simple interest and gave the amount to B as a loan
at the rate of 12% p.a. What is the amount he taken from the bank if he received a profit of Rs. 320 in 12-years?
(a) 666.67 (b) 665.67
(c) 566.67 (d) None
Q.65. The difference between the interests received from the two different banks on Rs. 500 for 2-years is Rs. 2.50. What is the difference
between their interest rates?
(a) ¼% (b) 1/3%

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FINANCIAL MATHEMATICS
(c) ½% (d) None
Q.66. What is the simple interest on Rs. 1820 from March 9, 2000 to May 21, 2000 at 7.5% p.a.?
(a) 20.25 (b) 20.20
(c) 27.00 (d) None
Q.67. In how many years will a sum of money double itself at 12% p.a. with simple interest?
(a) 8.55 (b) 8.44
(c) 8.33 (d) None
Q.68. If a sum of money is double itself in 8-years at simple interest, then what is the rate of interest in percent?
(a) 20.25 (b) 12.20
(c) 15.75 (d) None
Q.69. If a sum of money at simple interest doubles itself in 6-years, then how long it will take that the sum will become 4 times?
(a) 20 (b) 18
(c) 15 (d) None
Q.70. A sum of money becomes 8/5th times of itself in 5-years at simple interest at a certain rate of interest. What is the rate of interest?
(a) 20% (b) 15%
(c) 13% (d) 12%
Q.71. The rate of simple interest on a sum of money is 6% p.a. fir first 3 years, 8% p.a. for the next 5 years and 10% p.a. for the
remaining. If the total simple interest for a total period of 10 years is 1560, what is the sum?
(a) 2025 (b) 2020
(c) 2000 (d) None
Q.72. At what rate of percentage p.a. the simple interest, if Rs. 625 to Rs. 650 in 6-months?
(a) 5% (b) 7%
(c) 8% (d) None
Q.73. The price of the commodity is expected to increase by 15% the next week. If the increase brings the price to Rs. 7280, what would
be the price of the commodity this week?
(a) 6330.43 (b) 6330.85
(c) 6330.95 (d) None
Q.74. The rate of sales tax is 18% charged on retail price before charging (excluding sales tax). If retail price inclusive of sales tax is
295, calculate the sales tax.
(a) 25 (b) 20
(c) 35 (d) 45
Q.75. Suppose there were 150 traffic accidents last year. What is the number of traffic accidents if the number goes down 20%? What
happens if, in the following year, the number of accidents goes up 20%?
(a) 180 & 120 (b) 120 & 170
(c) 120 & 180 (d) 180 & 130
Q.76. How long will it takes for a sum of money to double itself at 10% simple interest?
(a) 20 (b) 10
(c) 30 (d) None
Q.77. On August 1, 2015, a supplier increased the price of a product by 25%. On August 15, 2015, he decreased the price by 16%. If
the price of the product on August 15, 2015 is Rs. 63, what was the price on July 31, 2015?
(a) 20 (b) 50
(c) 40 (d) None
Q.78. Some part of Rs. 10000 was lent at 8% per year and the remaining was deposited in a bank at 6% p.a. If the total simple interest
from both in 3 years was Rs. 2160, compute the amount lent at 8% per year.
(a) 5000 (b) 4000
(c) 2000 (d) None
Q.79. Ali borrows Rs. 5000 for 2 years at 4% p.a. simple interest. He immediately lends money to Ahsan at 25/4% p.a. for 2 years. Find
the gain of one year taken by Ali.
(a) 112.05 (b) 112.20
(c) 112.50 (d) None
Q.80. A company requires 60 lakhs after 5 years. It is decided to create the sinking fund by investing fixed amount at 10% p.a
compounded annually. What is the yearly investment?
(a) 982800 (b) 829800
(c) 989800 (d) None
Q.81. A machine costs Rs. 490740 and depreciates at 15% of its opening value each year. When does its value reduce to 90%?
(a) 11 years & 5 months (b) 11 years and 6 months
(c) 11 years and 7 months (d) None
Q.82. If the annual compound interest rate is 11% then what amount should be invested every year so as to accumulate Rs. 1000000
in 10 years?

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FINANCIAL MATHEMATICS
(a) 59802 (b) 59702
(c) 59902 (d) None
Q.83. A person deposits a sum of Rs. 1000 in a saving account at the end of a month. To what sum will the investment grow at the end
of five years if the rate of interest is 5% p.a. compounded monthly?
(a) 68071 (b) 60871
(c) 64871 (d) None
Q.84. A car purchased for Rs. 100000 down payment and an installment of Rs. 6500 per month for three years. What is the cash price
of the car if the interest rate is 15% p. a compounded monthly?
(a) 187616 (b) 287616
(c) 387616 (d) None
Q.85. Given annuity of Rs. 10000 amounts to Rs. 31371.2 at 4.5% p.a. compound interest, then what is the number of years?
(a) 25 (b) 20
(c) 15 (d) None
Q.86. A company is considering proposal of purchasing a machine either by making full payment of Rs. 8000 or by leasing it for 4-years
at an annual rent of Rs. 2500. Which course of action is preferable if the company borrow the money at 14% compounded annually?
(a) option (i) (b) option (ii)
(c) both (i) and (ii) (d) None
Q.87. A financier claims to lending money at simple interest but he compute the interest every six months for calculate the principal
amount, If the annually interest rate is 10% then what is the effective interest rate in one year?
(a) 10% (b) 10.25%
(c) 9% (d) None
Q.88. What will be the ratio between the simple interests earned by a certain amount at the same interest rates for 6-years and 9-years?
(a) 1:2 (b) 2:1
(c) 2:3 (d) 3:2
Q.89. Bank-A offers 12.25% interest rate compounded semi-annually on its saving account while the Bank-B offers 12% interest rate
compounded monthly on its saving account. Which Bank offers the highest effective interest rate?
(a) Bank-A (b) Bank-B
(c) Bank-A and B both (c) Can't be computed
Q.90. The nominal interest rate on an investment is 16 percent per annum. Determine the effective interest rate if interest is comp ounded
quarterly?
(a) 18% (b) 19%
(c) 20% (d) None
Q.91. A sum of certain amount Rs. 350000 is deposited in a saving account with 12% p.a. If annual interest rate falls from 12% to 8%
p.a. after 3 years, how much more will be deposited in the account to have Rs. 600000 in 5-years if both rates are compounded
semi-annually?
(a) 75001 (b) 80302
(c) 70302 (d) None
Q.92. If a sum of the certain amount p is increases to M with simple interest 12000 in 20 years with rate of interest at 5% p.a., then
what is the value of M?
(a) 21226 - p (b) 12000 - p
(c) 21226 - p (d) None
Q.93. A non-interest bearing note of Rs. 500000 is due in 4 years from now. If the note is discounted now at 8% compounded
semiannually then what will be the proceeds and compound discount?
(a) 150237 & 134500 (b) 145358 & 134600
(c) 365345 & 134655 (d) None
Q.94. A firm's labor force is growing at the rate of 2% p.a. The firm now employed 500 people. How many employees may it be expected
in five years time?
(a) 550 (b) 552
(c) 541 (d) 563
Q.95. The population of a city was 8 million on Jan, 2001. The population is growing at an exponential rate of 2% per year. What is the
total population on Jan, 2005?
(a) 8832646 (b) 8666297
(c) 8841369 (d) None
Q.97. A couple estimates that they can afford a monthly mortgage of Rs. 750. The mortgage interest rate is 10.25%. If a 30-years
mortgage is obtainable, what is the maximum mortgage loan this couple can afford?
(a) 83695 (b) 83696
(c) 83690 (d) None
Q.98. If the mortgage loan in above Q.97 is taken from HBFC at 10% per year for the 20-years then what is the monthly mortgage
payment?

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FINANCIAL MATHEMATICS
(a) 772 (b) 775
(c) 773 (d) None
Q.99. What is the total payment which has to be paid in 20-years in above Q.98?
(a) 185284 (b) 185286
(c) 185285 (d) None
Q.100. What is the total interest earned on the mortgage loan over the 20-years period in Q.98?
(a) 105285 (b) 105284
(c) 105290 (d) None
Q101. If the Net Present Value (NPV) of the all cash flows is positive at the assumed minimum desired rate of return then the actual rate
of return from the project needs to:
(a) exceeds the minimum desired rate of return (b) less the minimum desired rate of return
(c) (a) or (b) (d) not change
Q.102. If the Net Present Value (NPV) of the all cash flows is negative at the assumed minimum desired rate of return then the actual
rate of return from the project needs to:
(a) exceeds the minimum desired rate of return (b) less the minimum desired rate of return
(c) (a) or (b) (d) not change
Q.103. If the Net Present Value (NPV) of the all cash flows is zero at the assumed minimum desired rate of return then the actual rate of
return from the project needs to:
(a) exceeds the minimum desired rate of return (b) less the minimum desired rate of return
(c) (a) or (b) (d) not change
Q.104. What is the compound amount factor to which Rs. 1 would grow after n-periods if its earns compound interest of i-percent per
period?
(a) (1 + i)n (b) p(1 + i)n
(c) p(1 + i)-n (d) (1 - i)n
Q.105. What is the compound amount if Rs. 1 is invested for 8-years at 12% per year compounded annually?
(a) 2.50 (b) 2.40
(c) 2.30 (d) None
Q.106. What is the compound amount if compounded semi-annually in above Q.105?
(a) 2.54 (b) 2.55
(c) 2.56 (d) None
Q.107. What is the compound amount if compounded quarterly in above Q.105?
(a) 2.54 (b) 2.55
(c) 2.56 (d) None
Q.108. What is the compound amount if compounded bi-monthly in above Q.105?
(a) 2.54 (b) 2.55
(c) 2.56 (d) None
Q.109. What is the total interest earned if Rs. 1 is invested for 8-years at 12% per year compounded annually?
(a) 1.48 (b) 0.48
(c) 1.50 (d) None
Q.110. What is the total interest earned if Rs. 1 is invested for 8-years at 12% per year compounded semi-annually?
(a) 1.54 (b) 1.55
(c) 1.56 (d) None
Q.111. What is the total interest earned if Rs. 1 is invested for 8-years at 12% per year compounded quarterly?
(a) 1.48 (b) 0.48
(c) 1.50 (d) None
Q.112. What is the total interest earned if Rs. 1 is invested for 8-years at 12% per year compounded bi-monthly?
(a) 1.48 (b) 0.48
(c) 1.50 (d) None
Q.113. The net cash flows on a project are estimated to be as follows:
YEAR 0 1 2 3 4 5
Net Cash Flow -25000 8000 12000 9000 7000 7500
What is the NPV of the investment using a discount rate of 14%?
(a) 5360 (b) 5365
(c) 5566 (d) None
Q.114. A machine that costs Rs. 100000 is expected to have a life of five years and then a scrap value of Rs. 15000. If its expected net
returns are in Ist year-Rs. 20000, in 2nd year-Rs. 50000, in 3rd year-Rs. 35000, in 4th year-Rs. 35000 and in 5th year-Rs. 35000.
The project of this type are expected to return at least 18%. What is the value of NPV?
(a) 14069 (b) 14070
(c) 14080 (d) None

From the desk of ASIF SUMEER Page 7

FINANCIAL MATHEMATICS
Q.115. What are the comments on purchasing the machine in above Q.114?
(a) It will be purchased (b) It will not be purchased
(c) can't be decided (d) information are not completed
Q.116. A company is thinking of borrowing Rs. 70000 to invest in a project which is expected to yields Rs. 20000 at the end of each of
the next 6-years. If the cost of capital is 20%. What is the NPV?
(a) 3490 (b) 3590
(c) 3500 (d) None
Q.117. What will be the comments on the loan either it will be enough to repay the loan?
(a) It will be enough (b) It will not be enough
(c) Either (a) or (b) (d) None

From the desk of ASIF SUMEER Page 8