CUET UG Mathematics Applied Exponential Series Previous Year Questions (PYQs)
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Which of the following statements are correct?
A. If discount rate $>$ coupon rate, then present value of a bond $>$ face value
B. An annuity in which the periodic payment begins on a fixed date and continues forever is called perpetuity
C. The issuer of bond pays interest at fixed interval at fixed rate of interest to investor is called coupon payment
D. A sinking fund is a fixed payment made by a borrower to a lender at a specific date every month to clear off the loan
E. The issuer of bond repays the principal i.e. face value of the bond to the investor at a later date termed as maturity date
Choose the correct answer from the options given below:
1
2
3
4
Solution
A. If discount rate $>$ coupon rate, bond sells at discount
So present value $<$ face value ❌ False
B. Payment continues forever → Perpetuity ✔ True
C. Fixed periodic interest paid by issuer → Coupon payment ✔ True
D. Sinking fund is periodic deposit to accumulate money, not direct monthly loan repayment ❌ False
E. Principal repaid at maturity date ✔ True
Correct statements: B, C, E
Which of the following statements is true?
A. In flat rate method,
$\text{EMI}=\frac{\text{Principal}+\text{Interest}}{\text{Number of Payments}}$
B. In reducing balance method,
$\text{EMI}=P\times\frac{i}{1-(1+i)^{-n}}$
C. In sinking fund, a fixed amount at regular intervals is deposited.
D. Approximate Yield to Maturity
$\text{YTM}=\frac{\text{Coupon Payment}+\frac{\text{Face Value}-\text{Present Value}}{\text{Number of Payments}}}{\frac{\text{Face Value}+\text{Present Value}}{2}}$
Choose the correct answer from the options given below:
Choose the correct answer from the options given below:
1
2
3
4
Solution
A ✔ Correct formula for flat rate EMI
B ✔ Correct reducing balance EMI formula
C ✔ Definition of sinking fund
D ✔ Standard approximate YTM formula
Hence all statements are true.
Mr. Dev wishes to purchase an AC for Rs. $45,000$ with a down payment of Rs. $5,000$ and balance in EMI for 5 years.
If Bank charges $6%$ per annum compounded monthly, then monthly EMI is
(use $\frac{0.005}{1-(1.005)^{-60}}=0.0194$)
1
2
3
4
Solution
Loan amount
$=45000-5000=40000$
Monthly interest rate
$=\frac{6%}{12}=0.5%=0.005$
Number of months
$=5\times 12=60$
EMI formula:
$\text{EMI}=P\times\frac{i}{1-(1+i)^{-n}}$
Given factor:
$\frac{0.005}{1-(1.005)^{-60}}=0.0194$
So,
$\text{EMI}=40000\times 0.0194$
$=776$
The cost of a machine is Rs. $20,000$ and its estimated useful life is $10$ years.
The scrap value of the machine, when its value depreciates at $10%$ p.a., is
(use $(0.9)^{10}=0.35$)
1
2
3
4
Solution
$\text{Value after } n \text{ years}=P(1-r)^n$
Here,
$P=20000$
$r=0.1$
$n=10$
Value
$=20000(0.9)^{10}$
Given
$(0.9)^{10}=0.35$
So,
$=20000\times 0.35$
$=7000$
CUET UG Mathematics Applied
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CUET UG Mathematics Applied
Online Test Series, Information About Examination,
Syllabus, Notification
and More.
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