Chapter No.

05 Financial Mathematics

Q.1 Katappa borrowed $1000 from his friend Bahu and paid him back $1050 in six months.
What simple annual interest did Katappa pay to Bahu?

(a) $100 (b) $50

(c) $2050 (d) None of these
Q.2 Future value of Rs.6000 at the rate of 9% for 3 years and 4 months under simple interest?
(a) Rs.1800 (b) Rs.7800
(c) 1620 (d) None of these
Q.3 The population of Maldives in 2020 was 418403. If its population is increased at an
exponential rate of 2%, what will be the population of Maldives in 2025?
(a) 462407 (b) 461951
(c) 462406 (d) None of these
Q.4 If selling price for laptop is Rs.1100 and is marked down by 30% in promotional offers
then sale price after discount is?
(a) Rs.1571 (b) Rs.471
(c) Rs.770 (d) Rs.330
Q.5 A sum of money invested at compound interest amounts to Rs.21632 in 2 years and to
Rs.23397.1712 in 4 years. The sum of money is:
(a) 20800 (b) 21632
(c) 20000 (d) 19231
Q.6 An interest rate 12% compounded semi -annually is equivalent to…….. % compounded
monthly.
(a) 10.95 (b) 11.71
(c) 12.56 (d) None of these
Q.7 An amount of Rs. 5,000 was invested at compound interest of 5% per annum. The
amount would be doubled in approximately:
(a) 20 years (b) 17 years
(c) 14 years (d) Cannot be computed
Q.8 Punjab Government has issued a five years bond of Rs. 200,000. On maturity the buyer
will get Rs 300,000. If the current interest rate is 8% per annum, is purchasing the bond
worth?
(a) Yes, as present value of Rs 300,000 is more than Rs 200,000
(b) No, as present value of Rs 300,000 is more than Rs 200,000
(c) Yes, as present value of Rs 300,000 is less than Rs 200,000
(d) No, as future value of Rs 200,000 is more than Rs 300,000

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Q.9 Ilyas & Co. sold goods worth Rs.770000 in year 2004. If company is able to increase his
sale by 13% annually, in which year they would be able to achieve the sales of Rs.2.65
million?
(a) Year 2016 (b) Year 2017
(c) Year 2014 (d) Year 2015
Q.10 How much time required increasing the sum of money to double itself at 10% compound
interest?
(a) 10 years (b) 20 years
(c) 7.3 years (d) 11.5 years
Q.11 Bazooka invested Rs 500,000 for 5 years after which he received a lump sum amount of
Rs 762,150. If he earned 10% interest compounded annually during last 2 years, what
rate of interest compounded annually did he earn during the first three years?
(a) 6% (b) 7%
(c) 8% (d) 9%
Q.12 Dr. Strange has borrowed a certain amount at an interest of 12% compounded semi-
annually. In how many years the amount owed would double?
(a) 3 years (b) 5 years
(c) 6 years (d) 8 years
Q.13 Jamshed invested Rs 400,000 in an investment scheme and got Rs 545,881 at the end of
three years.Find effective rate, if interest was compounded monthly
(a) 1.41% (b) 1.92%
(c) 1% (d) 10.92%
Q.14 Azam & Moazzam invested Rs 10 million each compounded quarterly for 5 years. After
5 year Azam has 20% more than Moazzam. Azam rate is 10%. Find rate of Moazzam.
(a) 6.02% (b) 6.12%
(c) 6.27% (d) 6%
Q.15 Ali borrows Rs.500000 from his friend Kashif for the period of 7 years and Kashif
receive Rs. 896793 rupees. If the interest rate was 10% c.a for the last 4 years, find the
rate of first 3 years?
(a) 7% (b) 7.74%
(c) 7.47% (d) 4.77%
Q.16 Mola Jutt and Noori Nuth both invested same amount for 8 years. If Mola jutt’s rate of
return is 9% and Noori’s rate is 10% compounded annually then how much more percent
amount Noori will have after 8 years than Jutt?
(a) 1% (b) 8%
(c) 15.1% (d) 7.5%

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Q.17 If Mola Jutt and Noori Nath both invested same amount for 6 years and the rate of
interest are 9% and 10% compounded annually respectively. Then how much more
percent amount Noori will have after 6 years than Jutt?
(a) 1% (b) 8%
(c) 9.4% (d) 5.6%
Q.18 An investment of Rs. 1.5 million is made in a business for 4 years and gain is 0.5 million.
Find rate of gain under compound interest?
(a) 6.54% (b) 8.5%
(c) 7.45% (d) 9.4%
Q.19 If Present value is 1000,000 and interest is 750,000 in 4 years and 10 months. Find the
simple interest rate?
(a) 15.51% (b) 5.17%
(c) 7.75% (d) None of these
Q.20 Haris Rauf invests Rs.2 million and get 0.5 million at redemption. If n = 4, which is best?
(a) 7.15% Compounded monthly (b) 7.23% C.bi-monthly
(c) 8.1% simple interest (d) 7.51% C.quarterly
Q.21 Abdullah and Kashif invested equal sum in two different banks at 9% and 10% interest
compounded annually. In 6 years how much percent of sum will Kashif earn more than
Abdullah?
(a) 5.6% (b) 8.45%
(c) 7.45% (d) 6%
Q.22 David wants to invest some money for 6 years. He is offered four different interests.
Which one is better?
(a) 15% simple interest (b) 10% compounded annually
(c) 9% compounded semi-annually (d) 8% compounded monthly
Q.23 Sum of thrice of Arif and twice of Ali is 18000 and difference of thrice of Arif and twice
of Ali is 15000. How much amount Arif and Ali have?
(a) 5500, 750 (b) 3000, 750
(c) 4500, 750 (d) 2500, 750
Q.24 Bhutto Jani made an investment of Rs 1.2 million at 12% compounded quarterly & Shah
G made investment of Rs 1.8 million at 10% compounded annually. In how many years
Bhutto’s investment would exceed Shah’s investment?
(a) 17.68 years (b) 17 years
(c) 18 years (d) 21 years

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Q.25 Mr. Cheema invested Rs.2m and received Rs.2.49m after 3 years. Calculate the rate of
interest?
(a) 7.51% compounded monthly (b) 7.51% compounded quarterly
(c) 7.51% compounded bi-monthly (d) 7.58% compounded annually
Q.26 If an investment of Rupees 100,000 is made on a Digiskill business with a promise of 7%
interest earned each year for the next 10 years. The annual interest would be_______
(a) 7,000 (b) 700
(c) 17,000 (d) 7,700
Q.27 An amount of Rs. 5,000 was invested at compound interest of 5% per annum. The
amount would be doubled in approximately:
(a) 20 years (b) 17 years
(c) 14 years (d) Cannot be computed
Q.28 Bunty and Bubly have invested same amounts in two different investment schemes.
Bunty is getting a return of 8% compounded annually whereas Bubly gets a return of
10% compounded annually, the amount of Bubly’s interest over a period of six years
would exceed the amount of Bunty’s interest by
(a) 11.25% (b) 12%
(c) 31.57% (d) 8%
Q.29 What is the P.V value of Rs. 50,000 to be paid 6 years from now at 6.5% compound
interest?

(a) 72957 (b) 34267

(c) 70625 (d) 35000

Q.30 A father intends to buy a car for daughter on her 18th birthday. The car cost Rs. 20,
00,000 and is expected to remain same. How much he needs to save today at 12%
compounded semi- annually, if his daughter is 10 years old as of today.

(a) 787292.56 (b) 807766.45

(c) 80,000 (d) 245481.5

Q.31 Mr. Khan investment of Rs. 10,000 at the rate of 4% per annum compounded quarterly
will mature at the end of 5th year. Find the amount
(a) Rs. 12,000 (b) Rs. 132,02
(c) Rs. 12,202 (d) Rs. 15,302
Q.32 A person deposited Rs. 600,000 in bank @9% simple interest for 3 years and 3 months.
Calculate the amount of money he received at the end of period:
(a) 665,500 (b) 550,000
(c) 775,500 (d) 770,500

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Q.33 If nominal interest is 8% compounded quarterly, find compounded monthly rate.

(a) 5.25% (b) 6.25%
(c) 4.25% (d) 7.95%
Q.34 Mr. Kaali invested Rs 400,000 for ten years after which he received a lump sum amount
of Rs 900,000. If he earned 8.50% interest compounded quarterly during last five years
which of the following rate compounded quarterly did he earn during first five years.
(a) 7.89% (b) 8.25%
(c) 8.39% (d) 8.50%
Q.35 How much would Kamran need to invest now in order to have Rs. 10 million after 10
years, if the annual interest on the investment is 7.2% compounded quarterly?
(a) Rs. 4,247,239 (b) Rs. 5,855,536
(c) Rs. 4,898,791 (d) Rs. 5,000,000
Q.36 Find effective rate if investment earn interest 10% Compounded semi-annually in first
year, 12% Compounded quarterly in 2nd year and 8% Compounded annually in 3rd year.

(a) 15% (b) 12.5%

(c) 11.3% (d) 13.5%

Q.37 You are sitting in an office at your local financial institution on August 4. The bank
officer says to you, "We will make you a great deal. If we advance that line of credit and
you borrow $20,000 today, when you want to repay that balance on September 1 you will
only have to pay us $20,168.77, which is not much more!" Before answering, you decide
to evaluate the statement. Calculate the simple interest rate that the bank officer used in
her calculations.

(a) 11% (b) 9%

(c) 14% (d) 16%

Q.38 Amanat Ali bought a bike on cash basis for Rs. 170,000. The seller is willing to offer it
on following terms as well:
i. Pay Rs. 200,000 at the end of 1st year.
ii. Pay Rs. 300,000 at the end of 4th year.
iii. Pay Rs. 430,000 at the end of 5th year.
If the market interest rate is 17% per annum compounded annually. Shall Amanat Ali
accept any of the offers given by the dealer, if yes which offer is most beneficial?
(a) No (b) Yes, Option # i
(c) Yes, Option # ii (d) Yes, Option # iii

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Q.39 Chahat Fateh Ali Khan took Rs.200,000 from bank at 13.5% rate per year. What is the
total amount after 5 years if interest is paid compounded annually?
(a) 356700 (b) 376712
(c) 335000 (d) 337500
Q.40 If Naina and Maina both invested same amount for 6 years and the rate of interest are 8%
and 9% compounded annually respectively. Then how much more percent amount Maina
will have after 6 years than Naina?
(a) 5.6% (b) 8%
(c) 9.45% (d) 9.02%
Q.41 Don took a loan of Rs. 120,000 at x% simple interest per annum. The total amount he
paid after 4 years is Rs. 156,000.
Which of the following statement is correct?
(a) If he closes his loan after 3 years, he would pay total amount of Rs. 138000
(b) The simple interest rate is 7.5%
(c) Both a and b (d) None of these.
Q.42 Inspector Abhijeet took 200,000 from the bank at 13.5% p.a. what is value of its sum
after 5 years with simple interest?
(a) Rs. 335,000 (b) Rs. 125,000
(c) Rs. 435, 000 (d) Rs. 225,000
Q.43 The rate at which a sum becomes four times itself in 15 years at S. I will be?
(a) 10% (b) 12%
(c) 20% (d) 15%
Q.44 A certain sum of money lent out at S. I amount to Rs. 690 in three years and Rs.750 in 5
years. The sum lent is…
(a) Rs. 500 (b) Rs.600
(c) Rs. 700 (d) Rs. 800
Q.45 A loan is borrowed of Rs. 800,000 for 4 years and simple interest payable on loan is
650,000 find interest rate
(a) 15% (b) 12.3%
(c) 20.3% (d) 15.5%
Q.46 Mr. Qazi invested Rs. 300,000 and will receive Rs. 500,000 after 7 years. If the interest
rate is 8% compound bi-monthly for last 3 years then what will be the interest rate of first
four years compounded bi-monthly?
(a) 6.84% (b) 7.28%
(c) 5.28% (d) 8%

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Q.47 Given nominal rate 10% compounded monthly effective rate=?

(a) 11.47 (b) 09.47%
(c) 12.47% (d) 10.47%
Q.48 How much would Ahmad invest to get 10 million after 10 years if rate is 2.1%
compounded per year?
(a) 8.37 million approx. (b) 8.36 million approx.
(c) 8.12 million approx. (d) None of these
Q.49 Anwar Maqsood invested Rs. 400,000 in an investment scheme and got Rs. 545,881 at
the end of three years find effective rate, if interest was compounded monthly.
(a) 10% (b) 10.92%
(c) 11.25% (d) 9.92%
Q.50 Erin owes Charlotte $1,500 today. Unfortunately, Erin had some unexpected expenses
and is unable to make her debt payment. After discussing the issue, they agree that Erin
can make the payment nine months late and that a fair simple interest rate on the late
payment is 5%. How much does Erin need to pay nine months from now?

(a) 1556 (b) 1500

c) 1490 (d) 2200
Q.51 Bank B is offering interest @15% compounded semi-annually to all investments made
with that bank, Bank D is entering the market and want to attract the investors it has also
decided to give interest on monthly compounding at least what rate of interest should be
offered to attract investors from Bank B.
(a) 14.60% (b) 13.06%
(c) 12.05% (d) 10.25%
Q.52 A person invested some amount today at 0.7% per month compounded for 10 years find
his investment if he receivers Rs.10 million
(a) 3.329 million (b) 4.329 million
(c) 5.254 million (d) 2.189 million
Q.53 A person deposited Rs. 600,000 in bank @ 9% simple interest for 3 years and 3 months.
Calculate the amount of money he received at the end of period:
(a) 665,500 (b) 550,000
(c) 775,500 (d) 770,500
Q.54 If Rs. 200,000 is to grow to Rs. 649,464 in ten years period, at what annual interest rate
must it be invested, what is the effective rate of interest that is compounded semi-
annually?
(a) 12.89% (b) 17.5%
(c) 15% (d) 20%

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Q.55 If nominal interest is 8% compounded quarterly, find compounded monthly rate.

(a) 5.25% (b) 6.25%
(c) 4.25% (d) 7.95%
Q.56 Jalal borrowed Rs. 600,000 from Fahad for a period of 3 years and 9 months at r% simple
interest. He paid Rs. 400,000 in excess of the borrowed amount at the end of loan period.
The value of “r” is:
(a) 22.22% (b) 17.78%
(c) 17.09% (d) 16.67%
Q.57 Abdul Rehman invested Rs 400,000 for ten years after which he received a lump sum
amount of Rs 900,000. If he earned 8.50% interest compounded quarterly during last five
years which of the following rate compounded quarterly did he earn during first five
years.
(a) 7.89% (b) 8.25%
(c) 8.39% (d) 8.50%
Q.58 Rashid has saving of Rs. 3.6 million whereas Sajjad has savings of Rs. 5.4 million. If
Rashid invest his savings @ 9% compounded quarterly whereas Sajjid invest his savings
at 7% compounded annually, in how many years would the value of Rashid’s Saving
exceed that of Sajjad’s saving.
(a) 9 years (b) 14 years
(c) 19 years (approx.) (d) 24 years
Q.59 How much would Kamran need to invest now in order to have Rs. 10 million after 10
years, if the annual interest on the investment is 7.2% compounded quarterly?
(a) Rs. 4,247,239 (b) Rs. 5,855,536
(c) Rs. 4,898,791 (d) Rs. 5,000,000
Q.60 Shafqat borrowed Rs. 1000,000 at simple interest of 8.5% per annum. At the end of the
loan period he repaid a total of Rs. 1,510,000. Period of the loan was:
(a) 5 years 9 months (b) 6 years
(c) 6 years 3 months (d) 7 years
Q.61 Saad borrowed Rs 600,000 from Fahad for a period of 3 years and 9 months at r %
simple interest. He paid Rs 400,000 in excess of the borrowed amount at the end of loan
period. The value of “r” is:
(a) 22.22% (b) 17.78%
(c) 17.09% (d) 16.67%
Q.62 Which of the following formula is correct of future value (simple interest):
(a) P(1+rt) (b) P+I
(c) P + PRT (d) All of these

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Q.63 Mr. Arif Alvi is effectively paying the interest of 16.42% on its loan to the bank. What
actual rate is quoted by bank to Mr. Alvi if the interest rate is compounded quarterly?
(a) 15.5% (b) 17.46%
(c) 16% (d) 17.64%
Q.64 A tree increases annually by 1/6th of its height. By how much will it increase after 3
years, if it stands today 60 cm high?
(a) 95.28 cm (b) 35.28 cm
(c) 90 cm (d) 30 cm
Q.65 Mr. Faisal invested Rs.300000 and will receive Rs.500000 after 7 years. If the interest
rate is 8% compounded bi-monthly for last 3 years then what will be the interest rate of
first four years compounded bi-monthly?
(a) 6.84% (b) 2.82%
(c) 8% (d) 2.28%
Q.66 If an amount of Rs. 500,000 is invested in a scheme at 1.5% per month for 5 years then
(a) He will get 150,000 per annum (b) He will get 75,000 per annum
(c) He will get gain of Rs 19300 after 5 years (d) All of these
Q.67 Ahmed invested Rs. 5000 for 4 years. The nominal rate remains 8% in each year,
although in first year it is converted semi-annually, in 2nd year converted quarterly, in
third year it is converted monthly and in fourth year converted daily. What is
accumulated value?
(a) 7686.76 (b) 6867.61
(c) 68700.5 (d) 68095.6
Q.68 Shahid Afridi borrowed Rs.20,000 from a bank at a simple interest rate of 12 percent per
annum. In how many years will he owe interest of Rs.3,600?
(a) 1.5 years (b) 1.55 years
(c) 1.6 years (d) 1.45 years
Q.69 How long will it take for a sum of money to double itself at 10% simple interest?
(a) 7 years (b) 9 years
(c) 5 years (d) 10 years
Q.70 The sum required to earn a monthly interest of Rs.1200 at 18% per annum SI is:
(a) Rs.50,000 (b) Rs.60,000
(c) Rs.80,000 (d) None of these
Q.71 In what time will Rs.1,800 earns simple interest of Rs.390 at the rate of 5% per annum?
(a) 5 years 2 months (b) 4 years 4 months
(c) 4 years 5 months (d) None of these

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Q.72 An amount of Rs.20,000 is due in three months. The present value if it includes simple
interest at 8% is:
(a) Rs.19,608.84 (b) Rs.19,607.84
(c) Rs.18,607.84 (d) Rs.19,507.84
Q.73 A sum of money would amount to Rs.6,200 in 2 years and Rs.7,400 in 3 years. The
principal and rate of simple interest are:
(a) Rs.3,800, 31.57% (b) Rs.3,000, 20%
(c) Rs.3,500, 15% (d) Rs. 4470, 19.3%
Q.74 A sum of money would double itself in 10 years. The number of years it would be four
times is (assume compound interest):
(a) 25 years (b) 15 years
(c) 20 years (d) 30 years
Q.75 A total of Rs.14,000 is invested for a year at simple interest, part at 5% and the rest at
6%. If Rs.740 is the total interest, amount invested at 5% is:
(a) Rs.9,000 (b) Rs.8,000
(c) Rs.6,000 (d) Rs.10,000
Q.76 If the simple interest on a certain amount for 15 months at 7½% per annum exceeds the
simple interest on the same amount for 8 months at 12½% per annum by Rs.32.50, then
the amount is:
(a) Rs.3,000 (b) Rs.3,060
(c) Rs.3,120 (d) Rs.3,250
Q.77 A certain sum is invested for X years. It amounts to Rs.400 at 10% simple interest per
annum. But when invested at 4% simple interest per annum, it amounts to Rs.200. Then
time (X) is:
(a) 41 years (b) 39 years
(c) 50 years (d) None of these
Q.78 An amount of Rs.7700 is to be divided among three brothers Zain, Zaid and Zoaib in
such a way that simple interest on each part at 5% per annum after 1 year for Zain, 2
years for Zaid and 3 years for Zoaib, respectively remains equal. The share of Zain is
more than that of Zoaib by:
(a) Rs.2,800 (b) Rs.2,500
(c) Rs.3,000 (d) None of these
Q.79 Ishfaque borrowed Rs.500 @ 3% per annum S.I. and Rs.600 @ 4.5% per annum on the
agreement that the whole sum will be returned only when the total interest becomes
Rs.126. The number of years, after which the borrowed sum is to be returned, is:
(a) 2 (b) 3
(c) 4 (d) 5

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Q.80 Ahmad lends Rs.2,500 to Bashir and a certain sum to Sameer at the same time at 7% p.a.
simple interest. If after 4 years, Ahmad altogether receives Rs.1,120 as interest from
Bashir and Sameer, then the sum lent to Sameer is:
(a) Rs.700 (b) Rs.1,500
(c) Rs.4,000 (d) Rs.6,500
Q.81 Donald Trump receives a total of Rs.5,700 per annum in interest from 3 stocks yielding
4%, 5% and 8% per annum respectively. The amount at 4% is Rs.20,000 more than the
amount invested at 5%, and the interest from the 8% investment is 8 times the interest
from the 5% investment. Find amount of money invested in each stock following simple
interest.
(a) Rs.10,000, 30,000 & 50,000 (b) Rs.10,000, 30,000 & 20,000
(c) Rs.20,000, 30,000 & 50,000 (d) Rs.10,000, 20,000 & 50,000
Q.82 Ali Asghar has purchased Rs.275,000 worth of Savings Certificate. The Certificate
expires in 25 years and simple interest rate is computed quarterly at a rate of 3 percent
per quarter. Interest cheques are mailed to Ali Asghar every 3 months. The interest Ali
Asghar can expect to earn every three months is:
(a) Rs.8,450 (b) Rs.8,250
(c) Rs.8,150 (d) Rs.8,350
Q.83 Arsam will receive Rs.5,000 six years from now. Present value at a compounded discount
rate of 8 percent is:
(a) Rs.3,150.9 (b) Rs.3,170.99
(c) Rs.3,160.99 (d) Rs.3,180.99
Q.84 At what rate of interest compounded semi-annually will Rs.6,000 convert to Rs.9,630 in
8 years?
(a) 5% (b) 6.1%
(c) 6% (d) 5.1%
Q.85 The effective rate of interest corresponding to a nominal rate 3% p.a. payable half yearly
is:
(a) 3.2% p.a (b) 3.25% p.a
(c) 3.0225% p.a (d) None of these
Q.86 The population of a small town increases every year by 2% of the population at the
beginning of that year. The number of years by which the total increase of population be
40% is:
(a) 7 years (b) 10 years
(c) 17 years (approx) (d) None of these
Q.87 The effective rate of interest corresponding a nominal rate of 7% p.a. convertible
quarterly is:

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(a) 7% (b) 7.5%

(c) 5% (d) 7.18%
Q.88 Osama bin Ladin invested Rs.8,000 for 3 years at 5% C.I in an Investment scheme. If the
interest is compounded once in a year, what sum will he get after 3 years?
(a) Rs.9,261 (b) Rs.8,265
(c) Rs.9,365 (d) None of these
Q.89 The compound interest on Rs.1,000 at 6% compounded semi-annually for 6 years is:
(a) Rs.425.76 (b) Rs.450.76
(c) Rs.475.76 (d) Rs.325.76
Q.90 A sum of money invested at compound interest amounts to Rs.4,624 in 2 years and to
Rs.4,913 in 3 years. The sum of money is:
(a) Rs.4,096 (b) Rs.4,260
(c) Rs.4,335 (d) Rs.4,360
Q.91 The population of Pakistan increases at the rate of 3% per annum. How many years will
it take to double itself?
(a) 21.45 years (b) 22.45 years
(c) 23 years (d) 23.45 years
Q.92 Calculate effective rate of interest where nominal rate is 8% compounded quarterly?
(a) 7.24% (b) 8.0%
(c) 8.42% (d) 8.24%
Q.93 A trust fund for a child’s education is being set up by a single payment so that at the end
of 10 years there will be Rs.240,000. If the fund earns at the rate of 8% compounded
semi-annually, amount of money should be paid into the fund initially is:
(a) Rs.108,533 (b) Rs.109,533
(c) Rs.109,433 (d) Rs.100,533
Q.94 The nominal interest rate on an investment is 12 percent per year. Determine the effective
annual interest rate if interest is compounded quarterly.
(a) 11.55% (b) 12.05%
(c) 12.55% (d) 11.55%
Q.95 A sports car was moving at a speed of 135 km per hour. When brakes were applied, the
speed of the car reduced to 43.2 km per hour in five seconds. Find the rate of decline in
the speed of the car per second, if the percentage decrease after each second was the
same.
(a) 20.37% (b) 20.74%
(c) 20.73% (d) 20.47%

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Q.96 The difference between C.I and S.I on a certain sum of money invested for 3 years at 6%
p.a. is Rs.110.16. The sum is:
(a) Rs.3,000 (b) Rs.3,700
(c) Rs.12,000 (d) Rs.10,000
Q.97 An amount of money lent at compound interest for 2 years at 20% per annum would
fetch Rs.482 more, if the interest was payable half-yearly than if it was payable annually.
The amount is:
(a) Rs.10,000 (b) Rs.20,000
(c) Rs.40,000 (d) Rs.50,000
Q.98 Imtiaz Mega Store sold goods worth Rs.3.0 million during 2008. If they are able to
increase his sale by 15% annually, in which year they would achieve annual sale of Rs.25
million?
(a) Year 2023 (b) Year 2024
(c) Year 2021 (d) Year 2000
Q.99 How much should Ahmad deposit now to yield Rs.600,000 at the end of five years at 9%
compounded half yearly?
(a) Rs.379,965 (b) Rs.389,964.9
(c) Rs.386,357 (d) Rs.387,964
Q.100 Shakib deposited Rs.100,000 in a bank for three years. The bank paid interest at the rate
of 8% per annum compounded half yearly during the first year and at the rate of 12% per
annum compounded quarterly during the last two years. His balance after three years is:
(a) Rs.137,013.85 (b) Rs.136,013.85
(c) Rs.147,013.85 (d) Rs.157,013.85
Q.101 Mr. Shayan invested Rs.60,000 in a company but found that his investment was losing
6% of its value per annum. After two years, he decided to pull out what was left of the
investment and place at 4% interest compounded twice a year. He would recover his
original investment in the______ year after investing at this rate?
(a) 4th year (b) 3rd year
(c) 2nd year (d) 5th year
Q.102 Mohsin wants to obtain a bank loan. Bank A offers a nominal rate of 14% compounded
monthly; Bank B a nominal rate of 14.5% compounded quarterly and bank C offers an
effective rate of 14.75%. Which option he should prefer, if all other terms are same?
(a) Bank A (b) Bank B
(c) Bank C (d) Cannot b
Q.103 The population of China is growing exponentially at a constant rate of 2 percent per year.
How much time this population will take to double itself?

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(a) 31.65 years (b) 32.65 years

(c) 30.65 years (d) 34.66 years
Q.104 The capital of a business grows at 12% per annum compounded quarterly. If present
capital is Rs.300,000 the capital after 12 years would be:
(a) Rs.2,159,019 (b) Rs.7,656,784
(c) Rs.1,168,792.8 (d) Rs.1,239,676
Q.105 Babar Azam has to repay a loan along with interest, three years from now. The amount
payable after three years is Rs. 428,000. The amount of loan presently if interest rate is
8% compounded Semi-annually is:
(a) Rs. 345,161 (b) Rs. 339,760
(c) Rs. 338,254 (d) Rs. 300,000
Q.106 To increase present value, the discount rate should be adjusted:
(a) Upward (b) Downward
(c) Not relevant (d) Will depend on time period
Q.107 A borrower has agreed to pay Rs.10,000 in 9 months at 10% simple interest. How much
did this borrower receive?
(a) Rs.9,090 (b) Rs.9,250
(c) Rs.9,500 (d) Rs.9,302
Q.108 Mr. Arsam received Rs.48,750 in cash as the proceeds of a 90 day loan from a bank
which charges 10% simple interest. The amount he will have to pay on the maturity date
is (assume 360days in a year):
(a) Rs.49,969 (b) Rs.50,000
(c) Rs.47,548 (d) Rs.53,625
Q.109 Dhani had invested Rs. 250,000 in a land ten years ago. Now, he wants to evaluate the
worth of the land he bought. What will be the value of land today if it is compounded at
6% per annum
(a) Rs. 265,000 (b) Rs. 235,850
(c) Rs. 447,712 (d) Rs. 416,667
Q.110 The annual cost of a company is Rs 500,000 at the moment. It is expected that due to re-
engineering the cost will reduce by 20% per annum for next two years. Compute the
annual cost for fourth year from now.
(a) Rs. 320,000 (b) Rs. 163,840
(c) Rs. 200,000 (d) Rs. 260,000
Q.111 Value of a KIA Sportage decreases by 10% every year of its cost. If the cost is Rs
700,000 today, compute its value two years from today.
(a) Rs. 630,000 (b) Rs. 560,000
(c) Rs. 567,000 (d) Rs. 500,000

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Q.112 A sum of Rs. 100,000 is invested at 10% per annum compounded quarterly. Find amount
that will received after 3 years.
(a) 134,489 (b) 143,984
(c) 413,489 (d) 489,134
Q.113 The discount factor for 3 years at 10% is:
(a) 0.751 (b) 0.683
(c) 0.826 (d) 0.909
Q.114 Mr. Putin invested Rs. 200,000 for 5 years at simple interest at 10%. At the end of fifth
year he withdrew entire amount and invested at 10% per annum compound interest for 2
years. Compute the amount that he will have with him at the end of 7th year from now.
(a) Rs. 400,000 (b) Rs. 300,000
(c) Rs. 63,000 (d) Rs. 363,000
Q.115 Mustafa lends Rs. 500,000 to Taha at 12% per annum compounded annually for 3 years
and Rs. 300,000 to Jawwad at 10% per annum compounded quarterly for a period of 3
years. Compute the effective annual rate of interest for amount lent to Jawwad
(a) 10% (b) 12.38%
(c) 10.38% (d) 11.38%
Q.116 Adnan invests Rs 450,000 at 10% simple interest for 4 years and Rs 900,000 at 10%
compound interest for the same time period. Compute the difference between the receipts
of two investments at the end of 4th year.
(a) Rs. 417,690 (b) Rs. 687,690
(c) Rs. 450,000 (d) Rs 867,690
Q.117 Find the future value of Rs. 7,000 invested at 10% per annum compounded quarterly for
three years and further invested at 12% per annum compounded semi-annually for two
years.
(a) Rs. 11,858.24 (b) Rs. 11,885.24
(c) Rs. 11,588.24 (d) Rs. 11,558.24
Q.118 Mr. Waqas Chaudhary invested Rs. 200,000 at 12% simple interest and Rs. 189,744 at
14% simple interest. The two amounts were left to grow till such time that the total of
interest and principal of both investments become equal.
(a) 4 (b) 3
(c) 2 (d) 5
Q.119 Mr. Ahmad has following investment options:
i. Invest in Bank A at 12% per annum compounded quarterly
ii. Invest in Bank B at 10% per annum compounded semi-annually
iii. Invest in Bank C at 8% per annum compounded monthly
iv. Invest in Bank D at 15% per annum.

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Which of the above options must he opt?

(a) Bank A (b) Bank B
(c) Bank C (d) Bank D
Q.120 Compute the effective annual rate of following options:
i. A: Investment of Rs. 200,000 resulting in a single 25% return on investment after
4 years.
ii. B: Investment of Rs. 300,000 resulting in a 15% per annum compounded semi –
annual return.
(a) A: 5.74% B: 15.56% (b) A: 5.54% B: 15.56%
(c) A: 5.64% B: 14.56% (d) A: 5.64% B: 15%
Q.121 A certain sum after 31 years at compounded interest compounded annually was
increased by 150%. What would be the increase of the same sum if simple interest rate
is applied ___ %
(a) Same impact (b) 93%
(c) 193% (d) Data is not sufficient
Q.122 In a Project Ali and Ahmad invested Rs. 200,000 at the annual rate of 7% and 7.5%
respectively. After 6 years Ahmad decides to withdraw his investment but Ali keeps his
amount in the project for 4 more years. What is the extra amount that Ali earned as
compared to Ahmad?
(a) Rs. 84770 (b) Rs. 86267
(c) Rs. 98772 (d) Rs. 96558
Q.123 Mr. Khan borrowed Rs. 500,000 from IMF at simple interest of 2% per month for a
period of 3 years. The principal is payable in equal monthly installment along with
interest.
(i) He would pay Rs. 120,000 per annum in interest
(ii) He would pay Rs 360,000 as an additional amount at the maturity date
(iii) At the end of year 1 his balance principal amount would be of Rs. 333,334
(iv) His monthly installment would be of Rs 29000
Which of the following set represent the correct statements
(a) i and ii only (b) i, ii and iii only
(c) ii and iii only (d) iii only
Q.124 Hammad Azhar borrows Rs.300 for 3 years and simple interest is computed for 3% per
quarter. Which of the following statement is correct?
(i) Amount of interest earned in each quarter will be of Rs. 9
(ii) Total interest earned in 3 years will be of Rs. 108
(iii) Accumulated amount at maturity date will be of Rs. 408

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(a) Only statement iii is correct (b) Only statement i and iii are correct
(b) All statements are correct (b) All statements are not correct
Q.125 Adnan owes Rs. 5000 due in 4 months and 7000 due in 9 months. What single payment
now will liquidate these obligations if money is worth 12% simple interest?
(a) Rs. 17655.29 (b) Rs. 11229.71
(c) Rs. 19870.23 (d) Rs. 14000.98
Q.126 DJ Bravo buys goods of amount Rs. 15000, paying down payment of Rs. 5000 and Rs.
5000 at the end of 6 months. If store charges interest of 18% compounded monthly on the
unpaid balance, what final payment will be necessary at the end of one year?
(a) Rs. 6488.96 (b) Rs. 7669.798
(c) Rs. 51998 (d) Rs. 6000
Q.127 Which of the following statement is correct?
(a) Discounting estimates future value of a particular amount invested today
(b) Discounting tells us actual funds that a particular investment will yield in future
(c) Discounting estimates the present day equivalent of an amount at a specified
time in the future at a given rate of interest
(d) All of the above
Q.128 ____ is the process of accumulating interest on an investment over time to earn more
interest.
(a) Compounding (b) Discounting
(c) Promoting (d) All of the above
Q.129 If future value is multiplied with ____ the result is present value
(a) Discount factor (b) Compound factor
(c) Rate of interest (d) Number of years
Q.130 If a two year investment leads to 10% increase in first year and a 10% decrease in second
year. What will be the effective gain/loss to investor over two years
(a) Break-even
(b) Loss of 1%
(c) Gain of 1%
(d) Cannot be determined with the information provided above
Q.131 A person invested Rs. 300,000 four years ago and received following returns:
Year 1 10%
Year 2 -10%
Year 3 8%
Year 4 0%
Compute effective annual gain over four years
(a) 1.69% (b) 8%
(c) 2% (d) 1.79%

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Q.132 Khushdil Shah invested Rs. 300,000 each in two investment plans at 20% per annum
compounded annually. The first amount was left to grow to a future value of Rs. 518,400
and the second amount was left to grow for one additional year. How many years was
second investment left to grow for?
(a) Three years (b) Four years
(c) Five years (d) Six years
Q.133 Babar Azam bought a car for Rs. 1,000,000 financed from a bank loan. It has been agreed
to repay bank loan along with interest at 10% per annum compounded annually five years
from the date car was bought. The agreement stated that in case of default the car will be
sold for repayment and any remaining amount will be contributed by Babar over a grace
period. The market value of car is increasing at the rate of 5% per annum. Assuming
Babar defaults on repayment date, what funds will he have to contribute over the grace
period?
(a) Rs. 334,228 (b) Rs. 343,228
(c) Rs. 243,228 (d) Rs. 434,228
Q.134 Faisal Javed invested an amount of Rs. 500,000 in a mutual fund on 1st January 2022.
The amount is expected to grow by 10% every year. Consider following information:
1. Actual growth rate was 2% above expected growth rate for the year 2022.
2. Actual growth rate was 2% below expected growth rate for the year 2023.
Calculate amount to his credit at the end of year 2023
(a) Rs. 500,000 (b) Rs. 616,000
(c) Rs. 605,000 (d) Rs. 604,800
Q.135 Mr. Shoaib invested Rs. 500,000 in mutual fund and Rs. 600,000 in stock market. The
investment in mutual funds grew by 10% in first year whereas the investment in stock
market lost its value over a period of one year such that at the end of first year the total
investment in both mutual funds and stock market totaled Rs. 1,100,000. Compute the
percentage decrease in value of investment in stock market
(a) 10% (b) 8.33%
(c) 9.33% (d) 10.33%
Q.136 An investment increased in value by 10% in first year and decreased in value by a certain
percentage in second year such that the net increase in value of investment over two years
was nil. Find the percentage decrease in second year
(a) 10% (b) 8.09%
(c) 7.09% (d) 9.09%
Q.137 A person invested certain amount for three years at simple interest such that the rate of
interest for the first year was 10% but increased by 2% for the next two years. Also the
new rate is applied on the funds available in the investment account at the end of each
year. Compute total percentage growth in investment over three years period.
(a) 36.98% (b) 37.98%
(c) 34% (d) 36.4%

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Q.138 Which of the following statements is/are true?

1. Simple interest is calculated on the principal amount and accumulated interest of
previous periods
2. Compound interest is calculated on the principal or original amount of a loan
3. The growth in compound interest is quite rapid as compared to simple interest
(a) 1 only (b) 2 only
(c) 1 and 3 (d) 3 only
Q.139 Chahat Fateh Ali Khan invested Rs. 4,000,000 for four years at 10% simple interest
today. After four years 25% of the total amount that was initially invested was spent on
higher education of his son and the entire remaining amount with him was further
invested for two years at 10% simple interest. Compute the amount to his credit after six
years from today
(a) Rs. 5,314,683 (b) Rs. 7,086,244
(c) Rs. 5,040,000 (d) Rs. 5,520,000

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