Read time: 1 min. Solve time: 10 mins
Lesson Objective
To assess your current knowledge of the topic and accordingly suggest which lessons to skip and where to start.
If you are already familiar with the topic, you may try the questions in the order they are given here, do not skip questions. If you find any question very doable, you can then skip the lesson as suggested below the question.
And if you dont want to take the test, want to start with Lesson 1 and proceed sequentially, start here.
Q. 1
A washing machine costs Rs. 40,950. Ajaj Finance offers a scheme where I can take home the washing machine without paying anything now and instead I pay equal instalments, at the end of every 1 year from now, for three years. For this they are charging an interest rate of 20% p.a. compound interest. Find the instalment amount to be paid each year.
Answer
Rs. 19,440
What is tested here?
The following formula for finding EMI when it is a case of Compound Interest.
$$ \text{EMI} = \frac{P \times r\% \times \left(1 + r\%\right)^n}{\left(1 + r\%\right)^n – 1}
If the question is not easily doable by you, then start here.
If you could solve this and are aware of the formula as given in ‘what is tested’, you can skip lesson 1 & 2. Try the next question to identify an appropriate lesson to start with.
Q. 2
A mobile phone worth Rs. 80,200 is available for Rs. 15,000 downpayment and 4 equal monthly instalments (emi), to be paid at end of each successive month. Find the emi amount if rate of interest is 15% p.a. simple interest.
Answer
Rs. 16,800
What is tested here?
The formula to find EMI when it is a case of Simple Interest
$$ \text{EMI} = \frac{ P \times \left( 1 + r \% \times n \right) }{n \;+\; r \% \times \frac{\left(n-1\right)\times n}{2}} $$
If the question is not easily doable by you, then start here.
If you could solve this and are aware of the formula as given in ‘what is tested’, you can skip lesson 3 as well. The two main learning agenda of this module is already known, the rest of the questions are just minor variations. Try the next question to confirm that the variations are also known or not.
Q. 3
A credit card offers to convert a purchase of Rs. 40,000 into 9 monthly EMIs of Rs. 5,000 each. If it is a case of simple interest, find the rate (% p.a.) being charged.
Answer
33.33… % p.a.
What is tested here?
This is a very common question in exams, when loan amount and EMI, both are given and rate of interest needs to be found.
If the question is not easily doable by you, then start here.
If you could solve this, you can skip lesson 4. Try the next question.
Q. 4
I bought a bike under an instalment scheme where I had to pay 4 annual instalments of Rs. 36,450 with the first instalment to be paid right away and 3 further instalments to be paid at the end of each successive years. Find the total interest paid, in Rs, if the rate of interest is 12.5% p.a. compound interest.
Answer
Rs. 22,550
What is tested here?
Interest paid = EMI × n − Loan. The question checks if this was known and if you could find the Loan amount given EMIs and other details.
If finding the Interest paid when bought on EMIs is not easily doable, then start here.
If you could solve this as well, you are pretty much aware of everything that will be taught in this Level 1 module. You can directly try solving an exercise with standard questions for further confirmation or more practice. Or you can proceed to Level 2 of Instalments.