Comparing Interest Rates: Bank of Delhi vs Bank of Gurgaon

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What is the monthly loan amortization amount for a loan of Rs. 6,00,000 at 12% annual interest rate?

Rs. 35,000

Rs. 33,249.1 (correct)

Rs. 30,000

Rs. 40,000

In the context of interest rates, what is the key advantage of compound interest over simple interest?

Greater benefit over longer investment periods (correct)

Faster growth in initial periods

Fixed interest rates

Higher interest rates applied

If Rs. 38.55 must be invested now to obtain Rs. 100 after 10 periods, what concept does this illustrate?

Compound Interest

Simple Interest

Present Value (correct)

Future Value

What formula is used to calculate the Effective Rate of Interest when interest is paid more often than once a year?

$Ei = (1 + rac{i}{m})^m - 1$ Signup and view all the answers

If the interest rate is 10% payable quarterly, what is the effective rate of interest?

10.38% Signup and view all the answers

What does 'Present Value' represent in financial terms?

Current value of a future amount Signup and view all the answers

In the context of interest rates, what does a higher number of compounding periods typically result in?

Higher effective interest rate Signup and view all the answers

How does compound interest differ from simple interest over time?

'Compound Interest' grows faster over time Signup and view all the answers

What does a lower present value indicate about a future amount?

'Future Value' decreases Signup and view all the answers

If Rs. 100 should be received after 10 years and the present value is Rs. 38.55, what concept is being demonstrated?

Present Value Signup and view all the answers

Comparing Interest Rates: Bank of Delhi vs Bank of Gurgaon

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Questions and Answers

What is the monthly loan amortization amount for a loan of Rs. 6,00,000 at 12% annual interest rate?

In the context of interest rates, what is the key advantage of compound interest over simple interest?

If Rs. 38.55 must be invested now to obtain Rs. 100 after 10 periods, what concept does this illustrate?

What formula is used to calculate the Effective Rate of Interest when interest is paid more often than once a year?

If the interest rate is 10% payable quarterly, what is the effective rate of interest?

What does 'Present Value' represent in financial terms?

In the context of interest rates, what does a higher number of compounding periods typically result in?

How does compound interest differ from simple interest over time?

What does a lower present value indicate about a future amount?

If Rs. 100 should be received after 10 years and the present value is Rs. 38.55, what concept is being demonstrated?

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