Gce Model Questions Vol1 2018 Commerce Question 34

Practice objective / multiple choice question 34 from the 2018 Gce Model Questions Vol1 Commerce examination.

Gce Model Questions Vol1 2018 Commerce Objective / Multiple Choice Medium Difficulty
Question 34 GCE_MODEL_QUESTIONS_VOL1 • 2018 • COMMERCE • objective

XYZ Ltd needs a loan of \(\text{₦}500{,}000\) for \(3\) years. Option A offers simple interest at \(9\%\) per annum. Option B offers interest compounded monthly at a nominal rate of \(8.5\%\) per annum. Calculate the total interest payable under each option and state which option is cheaper, giving the difference in interest between the two options.

Answer Options

A. Option A is cheaper; it saves \(\text{₦}12{,}000\) compared with Option B.
B. Option A is cheaper; it saves \(\text{₦}5{,}200\) compared with Option B.
Correct Answer C. Option A is cheaper; it saves \(\text{₦}9{,}750\) compared with Option B.
D. Option B is cheaper; it saves \(\text{₦}3{,}400\) compared with Option A.
Correct Answer
C
Correct Option:
Option A is cheaper; it saves \(\text{₦}9{,}750\) compared with Option B.

About This Question

This is Gce Model Questions Vol1 2018 Commerce Question 34. It is one of the objective questions from the 2018 Gce Model Questions Vol1 Commerce examination.

Difficulty level: Medium .

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