Question 1

Section C (4 Mark)

Read the senario and answer to the question.

Assume the following additional facts:

The Shankers have purchased a homeowner's policy (comprehensive) covering 100% of the replacement cost of their residence. This policy has a Rs. 500 deductible. Also, they have purchased a disability income policy with a 30-day elimination period and an any-occupation definition of disability.

What actions should the Shankers consider in order to improve the quality of the insurance program described above?

Options :

A : (I) only

B : (I) and (IV) only

C : (I) and (III) only

D : (II) and (IV) only

Answer: B

Question 2

Section B (2 Mark)

To pay for new equipment with a cash price of Rs7500, you need to borrow at 5.3% compounded monthly, then make monthly payments for 32 months. How much less would your payments be if you were able to save Rs2100 as a down payment before you purchase the new equipment?

Options :

A : Rs.269.47

B : Rs.198.96

C : Rs.70.51

D : Rs.88.14

Answer: C

Question 3

Section C (4 Mark)

A rate of interest of 10% semi-annual compounded quarterly would be equal to -------------------- % per annum compounded annually.

Options :

A : 20% per Annum Compounded Annually

B : 21.55% per Annum Compounded Annually

C : 20.50% per Annum Compounded Annually

D : 21% per Annum Compounded Annually

Answer: B

Question 4

Section B (2 Mark)

Mansi needs Rs. 25,000/-, 5 years from now. She would like to make equal payments at the Begin of each year from now onwards into an account that yields annual ROI @ 7 % per annum. What should be her annual payments?

Options :

A : 6023.43

B : 4050.23

C : 4093.43

D : 4062.87

Answer: D

Question 5

Section B (2 Mark)

You borrowed Rs8500, with the understanding that you are to make monthly payments over 36 months. Interest is charged at 7% compounded monthly. If you were to increase your payments by Rs20 per month, how much less time would it take you to pay back the loan?

Options :

A : 2.49 months

B : 2.81 months

C : 3.28 months

D : 1.55 months

Answer: B

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