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Basics of Financial Mathematics — Important Questions

CBSE · Class 11 · Applied Mathematics

45 important questions from Basics of Financial Mathematics for CBSE Class 11 Applied Mathematics, with answers.

45 questions25 flashcards3 formulas & key relations5 concepts

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45 Questions·
multiple choicemultiple correct

Important Questions from Basics of Financial Mathematics

1multiple correct

Which of the following statements about compound interest are correct?

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Interest is calculated on principal plus accumulated interest, Compound interest is always greater than simple interest for same period, The formula is A = P(1 + r)ⁿ

Compound interest calculates interest on principal plus accumulated interest, making it larger than simple interest. Formula A = P(1 + r)ⁿ is correct. Higher compounding frequency increases the final amount.

2multiple choice

If the effective annual rate is 10.25% when interest is compounded semi-annually, what is the nominal rate?

Show answer

10%

Using effective rate formula: 1.1025 = (1 + r/2)². Taking square root: 1.05 = 1 + r/2. So r/2 = 0.05, therefore r = 10%. Students often confuse nominal and effective rates.

3multiple choice

Calculate the future value of an ordinary annuity of ₹2,000 per year for 3 years at 6% interest.

Show answer

₹6,372

Using FV = PMT[(1+r)ⁿ - 1]/r. FV = 2000[(1.06)³ - 1]/0.06 = 2000[1.191 - 1]/0.06 = 2000 × 0.191/0.06 = 2000 × 3.186 = ₹6,372. Common error: using annuity due formula.

4multiple correct

Which factors affect the calculation of Income Tax in India?

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Gross total income, Deductions under Section 80C, Age of the taxpayer, Tax slab rates

Income tax depends on gross income, allowable deductions, age (different slabs for senior citizens), and applicable tax rates. Marital status doesn't directly affect tax calculation in India.

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What are the important topics in Basics of Financial Mathematics for CBSE Class 11 Applied Mathematics?
Key topics in Basics of Financial Mathematics include Interest and Interest Rates, Simple and Compound Interest, Effective Interest Rate and Equivalency, Present Value, Future Value, and Net Present Value. Study these first, then practise questions on each for Class 11 exams.
How many important questions are there in Basics of Financial Mathematics?
Super Tutor has 45 practice questions for Basics of Financial Mathematics, including multiple choice, multiple correct questions. A sample with answers is on this page.

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Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

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All CBSE Class 11 Applied Mathematics Important Questions

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