Financial Understanding

Let’s assume that you deposited 100,000 rupees in a bank account for 2 years at 8% interest rate. How much money will you have in your account in 2 years if you do not withdraw from or add to this account any money?

Imagine, than you deposited the money in a bank account at 8% interest rate, while the annual inflation rate was 10%. Do you think the money from your account can buy more or less, or the same amount of goods and services on average now as a year ago?

Let’s assume that you saw a TV-set of the same model on sales in two different shops. The initial retail price of it was 20,000 rupees. One shop offered a discount of 1,500 rupees, while the other one offered a 10% discount. Which one is a better bargain – a discount of 1,500 rupees or 10%?

Let’s assume that you took a bank loan of 10,000 rupees to be paid back during a year in equal monthly payments. The Interest charged is 100 rupees per month. Give a rough estimate of the annual interest rate on your loan.

Let’s assume that you deposited 100,000 rupees in a bank account for 5 years at 10% interest rate. The interest will be earned at the end of each year and will be added to the principal. How much money will you have in your account in 5 years if you do not withdraw either the principal or the interest?