Dear Reader, Below are three sample questions based on bank related transactions.
Ritika is a student of a famous Engineering College in Ongole. She wanted to buy a mobile phone but she is not inclined to disturb her father who is a farmer. A local Bank was ready to extend a loan for purchase of mobiles by students on simple interest. She chose a phone that costs 1500. The interest rate on the loan is 12%. If the loan is to be paid back in weekly installments over 2 years, calculate:
1. The amount of interest paid over two years
2. The total amount to be paid back
3. The weekly payment amount
(a) 300, 1800, 18 (b) 320, 1820, 22 (c) 350, 1850, 25 (d) 360,1860, 17.88
Answer : d) 360,1860, 17.88
Principal, P=1500 Number of Years, N= 2 years Rate of interest per annum, R=12%
Simple Interest,SI= P X N X R / 100 =1500X2X12 / 100=360.
Amount of interest to be paid back in 2 years is 360. Total amount to be paid back P + SI= 1500 + 360=1860. This is to be paid back in 104 weeks (one year has 52 weeks, hence two years would have 104 weeks). Therefore, interest per week =1860/104 =17.88 rupees.
Sherin, wanted to buy two mobile phones, one for her personal use and another for official use. She is keen to have two phones and two numbers to monitor the expenses. Another reason for her to buy a dedicated phone for official use is the availability of a provision to claim official phone expenses. Sherin borrowed two loans at simple interest, one for Rs.1800 at 7% per annum and the other for Rs.1700 at 8% per annum for the same period. She paid Rs.1310/- as total interest. Find the period for which she borrowed the money.
(a) 3 years (b) 6 years (c) 5 years (d) 6 1/2 years
Answer : c) 5 years
Let the period for which she borrowed money be n years.
Simple Interest On Rs.1800 at 7% per annum = SI1 = 1800 x n x 7/100
Simple Interest On RS. 1700 at 8% per annum = SI2 = 1700 x n x 8 /100
Total interest she paid back = Rs. 1310 = SI1 + SI2
1310 = 1800 x n x 7/100 + 1700 x n x 8 /100
1310 = 126n +136n or
n= 5 years
Ganesh is running a cool drinks shop near the famous Tiruchanoor temple. There is a large flow of traffic of tourists all through the day. The temple authorities do not permit the tourists to bring mobile phones inside the temple. Ganesh safe keeps mobiles of tourists for a fee of Rs.10/- per mobile.He also sells a few brands of mobiles to tourists who want to buy new ones for a price. Julius, a tourist wanted to buy a mobile from Ganesh. The selling price of the mobile was Rs.3900/-. Julius was not having enough money and persuaded Ganesh to take a cheque. The tourist issued a cheque for Rs.4750/- and took the difference amount in cash from Ganesh. Ganesh did not have a bank account for himself and so he preferred to hand over the cheque to his sister’s husband and took the amount less Rs.50/- towards bank charges. 5 days later, Ganesh received a phone call from his brother in law that the cheque given by Julius was returned unpaid.Bank charged Rs.100/- as handling charges. Ganesh's efforts to trace Julius was not fruitful. Ganesh paid the amount + 100 to his brother in law and took back the cheque. The cost price of the mobile was 3120/-. How much actual and notional gain or loss is made by Ganesh in the whole transaction?
(a) Loss 4120 and 4900 (b) Loss 4210 and 4980 (c) Gain 4900 and 5700 (d) Gain 3900 and 4700
Answer : a) Loss 4120 and 4900
Actual loss can be calculated without taking into account the profit percentage.
Cost price of mobile, RS. 3120 + Amount paid excess in cash to Julius against cheque, Rs 850 + Total bank charges (two occasions) 150 =4120
So, actual loss = Rs.4120/- ...(1)
Ganesh purchased the mobile for Rs 3120 and sold for Rs. 3900/-, expecting profit. So he would had expected Rs. 3900 - Rs. 3120 = Rs. 780 as profit.
Adding the above amount to his actual loss (from equation 1) will give the notional loss.
Therefore, notional loss = 4120+780=4900.
So, notional loss of Ganesh is Rs.4900/-