07 March 2016
Hi sir ,pls need explantion for the below problems for answers
32) You can borrow and lend at 5%. You have Rs. 100,000 today and you can consume today or a year later. You have now an opportunity to invest at 8% for a year in a real estate project. If you would like to consume everything now and nothing one year later, what is the maximum you can consume today (to the nearest integer)? A) Rs. 100,000 B) Rs. 150,000 C) Rs. 102,857 D) Rs. 97,222 Correct Answer: C 33) You can borrow and lend at 7%. You have Rs. 150,000 today and you can consume today or a year later. You also have an opportunity to invest at in a real estate project for a year. If decide to consume everything (the maximum you can) now and nothing one year later. You realize that the amount you can consume is Rs. 152,804. Given this, what is the rate of return that the real estate project offered you? A) 7% B) 9% C) 10% D) Cannot be determined Correct Answer: B 34) You can borrow at a certain rate for a one year period. You have Rs. 125,000 today and you can consume today or a year later. You also have an opportunity to invest at in a real estate project for a year at 9%. If decide to consume everything (the maximum you can) now and nothing one year later. You realize that the amount you can consume is Rs. 128,534. Given this, what is the borrowing rate in the market today for a one year period? A) 6% B) 9% C) 8% D) 10% Correct Answer: A 64) Rahul deposited Rs. 2,000 at the end of every month in a bank for five years. The rate of interest is 1% per month. The closest accumulated amount at the end of 5 years will be A) Rs. 1,20,000 B) Rs. 1,63,340 C) Rs. 1,34,630 D) None of the above Correct Answer: B
07 March 2016
Dear You need to calculate the amount that you receive if you invest the money for 1yr in real estate. That amount comes to be Rs. 108000/-. Now you decide to consume money today only. The cost of fund is 5%. Hence discount the money I.e 108000/- by 1.05. You will get the answer. It is maximum amount you can consume today.
CAclubindia
