Gce Model Questions Vol1 2019 Commerce Question 32

Practice objective / multiple choice question 32 from the 2019 Gce Model Questions Vol1 Commerce examination.

Gce Model Questions Vol1 2019 Commerce Objective / Multiple Choice Medium Difficulty
Question 32 GCE_MODEL_QUESTIONS_VOL1 • 2019 • COMMERCE • objective

A company needs a loan of \(\text{₦}500{,}000\) for 18 months. Offer A charges simple interest at 12% per annum. Offer B charges compound interest at 10% per annum, compounded half‑yearly. Which offer results in a lower total repayment and by how much?

Answer Options

Correct Answer A. Offer B is cheaper; the total repayment is ₦578,812.50 versus ₦590,000, a saving of ₦11,187.50.
B. Offer B is cheaper; the total repayment is ₦580,000.00 versus ₦590,000, a saving of ₦10,000.00.
C. Offer B is cheaper; the total repayment is ₦578,812.50 versus ₦595,000, a saving of ₦16,187.50.
D. Offer B is cheaper; the total repayment is ₦582,500.00 versus ₦590,000, a saving of ₦7,500.00.
Correct Answer
A
Correct Option:
Offer B is cheaper; the total repayment is ₦578,812.50 versus ₦590,000, a saving of ₦11,187.50.

About This Question

This is Gce Model Questions Vol1 2019 Commerce Question 32. It is one of the objective questions from the 2019 Gce Model Questions Vol1 Commerce examination.

Difficulty level: Medium .

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