MCQ Questions

Question No. 1

Umeala invests ₦6 000 at 9% per year for three years. Calculate the following.

Answer :

a) Draw up similar tables used in the example above for simple interest and compound interest.

b) Calculate the difference between the simple interest and compound interest at the end of each year.

c) Which option of investment should Umeala choose? Give a reason for your answer.

d) Use your tables to draw graphs of each investment.

e) After how many years does Umeala’s money double, using compound interest?

f) Use your graph to calculate the difference in the compound and simple interest value of the investment after five years.

Question No. 2

You invest ₦320 000 at 12% p.a. compound interest. Use the table below to calculate what your investment will be worth in three years.

Answer :

Question No. 3

You borrow ₦25 000 at 8% p.a. Do the following calculations – first based on simple interest, and then on compound interest.

Answer :

a) Calculate what the amount owed will be after five years.

b) Calculate the interest earned on the loan.

Question No. 4

How much simple interest is payable on a loan of ₦20 000 for a year, if the interest rate is 10% per annum?

Answer :

Question No. 5

How much compound interest is payable on a loan of ₦20 000 for a year, if the interest rate is 10% p.a.?

Answer :

Question No. 6

Discuss the following questions.

Answer :

a) Which type of interest would you like to pay, if you are the borrower?

b) Which type of interest would you like to earn, if you were an investor?

Question No. 7

Calculate the simple interest (SI) on ₦65 000 at 11.5% p.a for 4 ½ years.

Answer :

Question No. 8

Amenawon lent his sister ₦10 000 at 12% p.a. simple interest. She repaid him after 3 years. How much did he receive?

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Question No. 9

Edidiong borrowed ₦25 000 from his brother and agreed to pay it back after 3 years at 12% p.a. simple interest. Calculate the interest amount Yomi must pay his brother.

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Question No. 10

Calculate the interest amount on an investment of ₦45 000 at an interest rate of 6% p.a. for 7 years.

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Question No. 11

An amount of ₦600 000 is invested in a savings account which pays simple interest at a rate of 7.5% p.a. Calculate the balance accumulated by the end of 2 years.

Answer :

Question No. 12

Calculate the accumulated amount in the following situations:

Answer :

a) a loan of ₦80 000 at a rate of 8% for 1 year

b) an investment of ₦550 000 at a rate of 12.5% p.a. for 6 years

Question No. 13

Calculate the value of an investment ₦16 000 at 9% simple interest p.a. for 36 months.

Answer :

Question No. 14

The SI on an investment of ₦160 000, invested at 12.8%, for a number of years was ₦880. Calculate T.

Answer :

Question No. 15

An investment of ₦190 000 amounted to ₦14 000 after 5 years. What was the interest rate?

Answer :

Question No. 16

A woman invested ₦90 000 at 9.5% per annum simple interest for 1 years. The simple interest earned was ₦21 000. Calculate T.

Answer :

Question No. 17

Udo wanted to calculate the number of years she needed to invest ₦15 000, in order to accumulate ₦40 000. She has been offered a simple interest rate of 8.2% p.a. How many years will it take for the money to grow to ₦40 000?

Answer :

Question No. 18

Sangodela made a deposit of ₦80 000 in the bank for his 5-year-old son’s 21st birthday. He has given his son the amount of ₦92 000 on his birthday. At what rate was the money invested, if simple interest was calculated?

Answer :

Question No. 19

If ₦9 500 is invested for 5 years at 9% p.a., determine:

Answer :

a) the simple interest

b) the total amount at the end of the period

Question No. 20

Aderibigbe invested ₦72 500 for 12 years and earned ₦47 700. What was the interest rate per annum?

Answer :

Question No. 21

Akanmu invested ₦65 000 for 8 months at a simple interest of 8 3/4%. Find the simple interest amount.

Answer :

Question No. 22

Somadina invests ₦250 000 in a savings account on his 21st birthday. The interest paid on his savings is 11% p.a., compounded annually. Calculate the total value of the savings when he turns 40.

Answer :

Question No. 23

A woman wants to invest ₦500 000 into an account that offers a compound interest rate of 6% p.a. How much money will be in the account at the end of 4 years?

Answer :

Question No. 24

An amount of ₦55 000 is invested in a savings account which pays a compound interest rate of 7.5% p.a. Calculate the balance accumulated at the end of 2 years.

Answer :

Question No. 25

How much will Oisagie have in his account, if he invests ₦170 000 at 10.5% p.a. compound interest for 7 years?

Answer :

Question No. 26

How much will I have in my account, if I invest ₦145 000 for 4 years at 8% p.a. compound interest?

Answer :

Question No. 27

You want to buy a car for ₦3 500 000 in 3 years’ time. You invest ₦960 000 at 12% p.a. for the 3 years, compound interest. Will you have enough money?

Answer :

Question No. 28

Find the final amount, if the following amounts are invested, compound interest.

Answer :

a) ₦65 000 at 11% p.a. for 5 years

b) ₦40 000 at 9% p.a. for 3 years

c) ₦110 000 at 14.5% p.a. for 4.5 years

Question No. 29

Iberedembobong borrows ₦32 000 for a period of 6 years. He sees the two advertisements on the right: 15% per annum compounded annually; 17% per annum simple interest. By doing appropriate calculations, determine which is the best option for Iberedembobong.

Answer :

Question No. 30

Calculate how much you would earn, if you invested ₦8 000 for 1 year at the following interest rates:

Answer :

a) 6.85% simple interest

b) 4.00% compound interest

Question No. 31

Calculate the compound interest for the following:

Answer :

a) A ₦30 000 loan for 2 years at 5% p.a.

b) A ₦25 000 investment for 3 years at 6% p.a.

c) A ₦15 000 loan for 1 year at 16% p.a.

Question No. 32

Adama borrows ₦400 000 to buy a car. He is charged compound interest at 8% p.a. He repays ₦135 000 after 1 year. How much should he repay at the end of the third year to clear his debt?

Answer :

Question No. 33

Adeyanju borrows ₦205 000 at 7% compound interest. He pays back ₦55 000 at the end of each year. How much does he still owe after he has made his second repayment?

Answer :

Question No. 34

A man borrows ₦7.5 million to buy a building at an interest rate of 8% per annum. He pays ₦875 000 at the end of each year. How much does he still owe at the end of 3 years?

Answer :

Question No. 35

A car is worth ₦2 200 000 today. It depreciates at a rate of 14%. What is the value in 4 years’ time?

Answer :

Question No. 36

A second-hand farm tractor, worth ₦965 000, has a limited useful life of 5 years and depreciates at 20% p.a. Determine the value of the tractor at the end of each year over the 5-year period.

Answer :

Question No. 37

On 1 January 2008, the value of my Volkswagen Golf was ₦3 500 000. Each year after that, the car’s value decreased by 15% of the previous year’s value. What was the value of the car on 1 January 2012?

Answer :

Question No. 38

Etorro buys a truck for ₦1 500 000 and depreciates it by 9% p.a. What is the value of the truck after 14 years?

Answer :

Question No. 39

Okechukwu wants to sell his car in 5 years’ time. The rate of depreciation is 14% p.a., and the current value of the car is ₦1 800 000. Calculate the value of the car in 5 years’ time.

Answer :

Question No. 40

Adelakun buys an air conditioner costing ₦70 000. If the rate of depreciation is 12% p.a., what is its value after 4 years?

Answer :

Question No. 41

Adama bought a blender for ₦5 000. If its price depreciates by 10% p.a., how much will she be able to sell it for in 2 years’ time?

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Question No. 42

A new car cost ₦64 000. It depreciates by 22% in the first year, 18% in the second year and 13% in each of the following years. Find the value of the car after 3 years.

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Question No. 43

A car loses its value by 20% each year. If it cost ₦540 000, find its value after 2 years.

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Question No. 44

A bus was bought in 1997 for ₦700 000 and its value depreciated at the rate of 20% p.a. Calculate the value of the bus in 2001.

Answer :

Question No. 45

The price of a bag of oranges is ₦300. How much will it cost in 9 years’ time, if the inflation rate is 12% p.a.?

Answer :

Question No. 46

A long-lost relative paid ₦7 000 000 for a house 15 years ago and you inherit the property. What is the value of the house today, if the inflation rate is calculated at 17% p.a.?

Answer :

Question No. 47

You purchase a car for ₦1 700 000 and inflation is expected to be 8% p.a. for the next 5 years. The depreciation rate is 13%.

Answer :

a) In which year will your car lose the most value?

b) What will the value of your car be after 5 years?

c) What would the cost of a new car be in 5 years’ time?

d) If you used your old car as a trade-in in 5 years’ time, how much more would you need to buy a similar new car?

Question No. 48

In January 2012, Tunde worked for a hotel chain. Tunde’s gross annual salary was ₦200 000. Tunde’s employer offers him an “inflation-linked” salary increase of 5% for 2013. What will Tunde’s gross salary be after this increase?

Answer :

Question No. 49

The average price of a movie ticket is ₦800. If the average rate of inflation is 9.2% p.a., what would the price of a movie ticket be in 6 years’ time?

Answer :

Question No. 50

Study the advertisements below from Shop Smart Supermarket. Use them to answer the questions that follow.

Answer :

a) Calculate the percentage increase in the prices of chicken and milk from 2014 to 2015. Remember that percentage increase = (new price − old price) ⁄ old price × 100%.

b) If the price of rice increased by 10%, what would its price be in 2015?

c) Which item had the highest percentage increase?

d) What would you say are the factors that influence inflation?

e) Add the 2015 prices of the three items and calculate what these three items would cost in 2020, if inflation were 6% p.a.

Question No. 51

Adaobi bought a machine costing ₦65 000. How much will the same machine cost in 2 years’ time, if the rate of inflation is 15% p.a.?

Answer :

Question No. 52

If the rate of inflation is 25% per annum, how long will it take for the price of an item to double?

Answer :

Question No. 53

If the value of a value increases by 25% p.a., find the percentage by which the price increases each year.

Answer :

Question No. 54

The present cost of a DVD player is ₦5 800. If the inflation rates for the next 2 years are 20% and 10% respectively, find the price of the DVD player in 2 years’ time.

Answer :

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