Skip to content

NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Investment Landscape

Ramesh invested Rs 50,000 in a bank deposit that paid 8% simple interest per annum for 3 years. What is the total amount he receives at maturity?

Ramesh receives Rs 62,000. Simple interest is calculated only on the original principal: 50,000 x 8% x 3 years gives Rs 12,000, which added to the principal yields Rs 62,000. Compounding would give a higher figure, but the deposit pays simple interest.

  1. ARs 62,000Correct
  2. BRs 63,000
  3. CRs 60,000
  4. DRs 62,986

Explanation

Simple interest = 50,000 x 8% x 3 = Rs 12,000. Maturity amount = 50,000 + 12,000 = Rs 62,000. Rs 62,986 wrongly uses annual compounding (50,000 x 1.08^3 = 62,985.6). Rs 60,000 counts only 2 years of interest.

Did you get it right without looking?

One question tells you little. A timed set on Investment Landscape shows your real accuracy, how long you take and where you lose marks.

Practise Investment LandscapeFree diagnostic mock

More Investment Landscape questions