B. Com D1 Basic Finance

Basic Finance for Everyday Life

Dr. Antony Joseph K

Check your Financial Knowledge
1. Imagine you have deposited Rs. 1,00,000 with a bank at 7.5 per cent per
annum for one year. How much money will be there in your account after
one year?

More than Rs. 1,07,500 Less than Rs. 1,07,500
Exactly Rs. 1,07,500 None of the above

2. Assume that you have deposited Rs. 1,00,000 with a nationalized bank for
5 years at 8 per cent per annum. The interest will be earned at the end of the
year and will be compounded with the principal. How much money will be
there in your account at the end of the year?
Rs, 1,40,000 More than Rs. 1,40,000
Less than Rs. 1,40,000 Rs. 1,44,800

3. Let us assume that your income in 2025 will be twice as much now, and
consumer prices also grow twofold. Do you think that in 2025, you will be
able to buy more, less, or the same amount goods and services as today?
More than today Exactly the same
Information is not
Less than today
enough
4. Imagine you have deposited Rs. 1,00,000 with a bank at 8 per cent per
annum for one year. The rate of inflation is 10 per cent. What do you think
that the money from your bank account can buy more, or less or same
amount of goods and services after one year as of now?
More than a year ago Same
Less than a year ago I can’t find an answer

5. Assume that you have found a TV set of the same model on sale in two
shops. The initial retail price was Rs. 25,000. One shop offered a discount of
Rs. 2,500 while the other one offered 12.5 per cent discount. Which one is a
better bargain?
12.5% discount Rs. 2,500
Both are same I can’t estimate

6. Let us assume that you took a bank loan of Rs. 1,00,000 to be paid back
during a year in equal monthly payments. The bank has charged Rs. 6,000 as
interest. Give a rough estimate of the annual interest rate on loan.
6.5 per cent More than 6 per cent
Less than 6 per cent Can’t answer

7. “Over the long run, people can expect to earn more money by investing in
shares than by putting money with fixed deposit in a bank.” Is it true?
Generally expected Very little chance
No chance Impossible
8. A credit card service providing Company offers credit @2 percent. A card

holder has utilised the credit facility od Rs. 1,00,000 for 6 months. How
much will be the interest payable by the card holder?
Rs. 2,000 Rs. 1000
Rs. 12,000 More than Rs. 12,000

9. A housing finance Company is offering housing loan @10%. A

commercial bank is offering the same housing finance facility @10%p.a.
Considering the cost of finance, rate the preference?
Both are equally preferred Not equal
Housing Finance Co. is

Bank is better
better
10. CIBIL score of a person depends on his/her loan repayment behaviour,

credit card settlement, and investment in mutual fund
Loan repayment & credit

Loan repayment only
card behaviour
Loan repayment/credit card
and depends on investment
on mutual mefics
A street vendor has procured 3 varieties of vegetables from farmers, the
details of purchase are as; Item A : 50 kg @Rs. 14, B:30 kg @ Rs. 24 per kg
and C; 20 kg @ Rs.50 per kg. He mixed the items and put them in 100 bags
for sale. If the vendor is expecting a profit of Rs. 25 per bag, at what price
vendor will sell (per bag) the vegetable bags to customers?
Approximately Rs. 50 Approximately Rs. 40
Around Rs. 35 Rs. 125

Mohan is thinking about subscribing a life insurance policy. What are the
factors to be considered by him while choosing the product?
a) Own income b) Extent of risk coverage b & c only

A, b, and c
B&C only
A, b, c, and D
c) Premium charged d) Claim settlement rate
Mr. John want to make a retirement fund for securing his post retirement life.
He is ready to take moderate risk and is expecting a return above the bank
interest. From among the following which combination of investment will
you suggest for him?
a) Treasury Bill b) Equity

a) and b)
b) and c)
c) and a)
c) Debentures d) Mutual Funds

From among the following which one is the best strategy to avoid the
financial troubles in connection with medical treatment of the family
members?
a) Keeping some money b) Depositing some money for

for medical issues medical treatment
c) Subscribing medical d) Depend on public medical

insurance policy system only
Task for You - 1
Visit the Website of National Centre for Financial Education
https://www.ncfe.org.in
E-LMS : Attend the financial education program for 5 hours

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Basic Finance for Everyday Life

Dr. Antony Joseph K

More than Rs. 1,07,500 Less than Rs. 1,07,500

Exactly Rs. 1,07,500 None of the above

Rs, 1,40,000 More than Rs. 1,40,000

Less than Rs. 1,40,000 Rs. 1,44,800

More than today Exactly the same

More than a year ago Same

Less than a year ago I can’t find an answer

12.5% discount Rs. 2,500

Both are same I can’t estimate

6.5 per cent More than 6 per cent

Less than 6 per cent Can’t answer

Generally expected Very little chance

8. A credit card service providing Company offers credit @2 percent. A card

Rs. 2,000 Rs. 1000

Rs. 12,000 More than Rs. 12,000

9. A housing finance Company is offering housing loan @10%. A

Both are equally preferred Not equal

Housing Finance Co. is

10. CIBIL score of a person depends on his/her loan repayment behaviour,

Loan repayment & credit

Approximately Rs. 50 Approximately Rs. 40

Around Rs. 35 Rs. 125

a) Own income b) Extent of risk coverage b & c only

a) Treasury Bill b) Equity

c) Debentures d) Mutual Funds

a) Keeping some money b) Depositing some money for

c) Subscribing medical d) Depend on public medical

Visit the Website of National Centre for Financial Education

E-LMS : Attend the financial education program for 5 hours

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