Ch-12 & 13 Grade:12

Jeevan Nagar, Sanwali Road, Sikar-332021, (Raj.) Subject: Applied Mathematics

Name: ______________________ Date: 22/07/2024

1. Which of the following is a type of annuity forever?

(a) Perpetuity (b) Sinking fund (c) Recurring deposit (d) EMI
2. Which of the following is correct regarding perpetuity?
(a) Perpetuity is a situation where a stream of cash flow payments continues for a
definite period of time.
(b) Perpetuity is a situation where a stream of cash flow payments continues
indefinitely.
(c) Perpetuity is a situation where a stream of cash flow payments may continue forever
or for a definite period of time.
(d) None of the above.
3. Which of the following represents the formula to calculate the future value of the
perpetuity at the rate per period which yields ₹ at the end of each period?

(a) (b) (c) (a) or (b) (d) Cannot be determined

4. Which of the following represents the formula to calculate the Present value of the
perpetuity at the rate per period which yields ₹ at the beginning of each period?

(a) (b) (c) (a) or (b) (d) Cannot be determined

5. What is the primary purpose of a sinking fund?

(a) To generate returns through investments
(b) To provide a financial cushion for unexpected expenses
(c) To repay a loan or debt
(d) To accumulate money for a future obligation
6. What is the formula for the amount of sinking fund?

(a) (b)

(c) (a) or (b) (d) Cannot be determined

7. What is the formula for the EMI using flat rate method?

(a) (b) (c) (d) None of these

8. What is the formula for the EMI using reducing balance method?
 (a) (b)

(c) (a) or (b) (d) (b) or (c)

9. What is the formula for the rate of return on investment?

(a)

(b)

(c)

(d) (b) or (c)

10. What is the formula for the effective rate of return?
(a)

(b)
(c) (a) or (b)
(d) (a) and (b)
11. What is the formula for the effective rate of return, if interest is compounded
continuously?
(a)

(b)

(c)
(d) Cannot be determined
12. What is the formula for Compound Annual Growth Rate (CAGR)?

(a) (b)

(c) (a) or (b) (d) (a) and (b)

13. What is the formula for annual depreciation by linear method?

(a)

(b)
 (c)

(d)

14. What is the equated monthly installment (EMI)?

(a) The monthly payment required to repay a loan
(b) The monthly payment required to invest in a mutual fund
(c) The monthly payment required to purchase a stock
(d) The monthly payment required to purchase a bond
15. What is the effective rate of interest?
(a) The rate of interest that is charged on a loan
(b) The rate of interest that is earned on an investment
(c) The rate of interest that is equivalent to the nominal rate of interest
(d) The rate of interest that is equivalent to the annual percentage rate
16. What is the concept of depreciation?
(a) The decrease in value of an asset over time
(b) The increase in value of an asset over time
(c) The value of an asset at the end of its useful life
(d) The value of an asset at the beginning of its useful life
17. Which of the following is not the value of depreciable asset at the end of its useful life?
(a) Scrap value (b) Salvage value (c) Depreciated value (d) Useful value
18. EMI depends on the following factors
(a) The amount of loan (b) The loan tenure
(c) The interest rate (d) All of these
19. The original value of a share is called as
(a) Nominal value (b) Market value (c) Face value (d) (a) or (c)
20. The investment is always calculated on ________ of the share.
(a) Nominal value (b) Market value (c) Face value (d) (a) or (c)
21. The dividend is always calculated on ________ of the share.
(a) Nominal value (b) Market value (c) Face value (d) (a) or (c)
22. What is the present value of a perpetuity of ₹1000 payable at the end of each year,
given a discount rate of 8% per annum?
(a) ₹12500 (b) ₹15000 (c) ₹17500 (d) ₹20000
23. A perpetuity of ₹1000 payable at the end of each year has a present value of ₹20000.
What is the discount rate?
(a) 5% (b) 10% (c) 15% (d) 20%
24. An investment of ₹50000 earns an interest of ₹5000 in a year. What is the rate of return
on investment?
(a) 10% (b) 12% (c) 15% (d) 20%
25. A machine costs ₹100000 and depreciates at a rate of 10% per annum. What is the
value of the machine after 2 years using straight line method?
 (a) ₹81000 (b) ₹90000 (c) ₹95000 (d) ₹80000
26. Ram invested ₹135000 on ₹100 shares at a discount of ₹10 paying 12% dividend. At
the end of the year, he sells the shares at a premium of ₹20, his rate of return is:
(a) 35.56% (b) 46.67% (c) 54.46% (d) 58.67%
27. The effective rate, which is equivalent to a declared rate of 12% compounded
semiannually, is:
(a) 11.86% (b) 11.98% (c) 12.36% (d) 12.54%
28. A person invested ₹180000 in a mutual fund in year 2016. If the value of mutual fund
increased to ₹225000 in year 2020, then Compound Annual Growth Rate (CAGR) of

his investment is: [use

(a) 5.7% (b) 10.57% (c) 57% (d) none of these
29. A machine costing ₹C would reduce to ₹10000 in 7 years. If annual depreciation
charge is ₹10000, then the value of C is:
(a) 80000 (b) 70000 (c) 60000 (d) none of these
30.If the cash equivalent of a perpetuity of ₹300 payable at the end of each quarter is ₹
24000 then rate of interest converted quarterly is
(a) 5% (b) 4% (c) 3% (d) 2%
31.A machine costing ₹ 30,000 is expected to have a useful life of 4 years and a final scrap
value of ₹ 4000. The annual depreciation is
(a) ₹5500 (b) ₹6500 (c) ₹7500 (d) ₹8500
32.If the investment of ₹ 20000 in the mutual fund in 2015 increased to ₹32000 in year
2020, then CAGR (Compound Annual Growth rate is) is [Given (1.6)1/5 = 1.098]
(a) 9.08% (b) 9.8% (c) 0.098% (d) 0.09%
33.The present value of sequence of payment of ₹ 1000 made at the end of every 6 months
and continuing forever, if money is worth 8% per annum compounded semi-annually is
(a) 1000 (b) 2500 (c) 25,000 (d) 15,000
34.Reema has an initial investment of ₹ 1,00,000 in an investment plan. After 5 years, it
has grown to ₹ 2,00,000 then rate of return is:
(a) 50% (b) 100% (c) 75% (d) 200%
35.The sum of money is needed now, so as to get ₹6000 at the beginning of every month
forever, then the money is worth 6% per annum compounded monthly is
(a) ₹ 1000000 (b) ₹ 1206000 (c) ₹ 60,000 (d) ₹ 1600000
36.If the nominal rate of interest is 12.5% and the inflation is 2%, then the effective rate of
interest is
(a) 10.5% (b) 10% (c) 9.5% (d) 9%
37.₹ 2,50,000 cash is equivalent to a perpetuity of ₹ 7,500 payable at the end of each
quarter. The rate of interest convertible quarterly is
(a) 7% p.a. (b) 9% p.a. (c) 11.5% p.a. (d) 12% p.a.
38.A washing machine costing ₹25,000 is expected to have a useful life of 7 years and a
final scrap value of ₹2000. The annual depreciation charge using the straight line
 method is
(a) 3,000 (b) 3,500 (b) 3,826 (c) 3,906
39.An investment’s starting value is ₹ 15,000 and it grows to ₹ 75,000 in 5 years, then its
compound annual growth rate is: [Given 51/5 =1.379]
(a) 37% (b) 38% (c) 39% (d) 40%
40.Mrs. Singh has takes loan of ₹1,00,000 with 10% annual interest rate for 5 years. The
EMI under the flat rate system is
(a) ₹ 5,000 (b) ₹ 2,500 (c) ₹ 50,000 (d) ₹ 25,000