Gce Model Questions Vol1 2019 Commerce Question 42

Practice objective / multiple choice question 42 from the 2019 Gce Model Questions Vol1 Commerce examination.

Gce Model Questions Vol1 2019 Commerce Objective / Multiple Choice Medium Difficulty
Question 42 GCE_MODEL_QUESTIONS_VOL1 • 2019 • COMMERCE • objective

A small business needs \(\text{₦}500,000\). It can obtain finance in two ways:\n\nOption A: a bank loan at \(10\%\) per annum simple interest for 3 years, repaid in equal annual instalments.\n\nOption B: a hire‑purchase arrangement requiring a \(20\%\) down‑payment, with the balance financed at \(15\%\) per annum simple interest for 3 years, also repaid in equal annual instalments.\n\nCalculate the total amount payable under each option and state which option is cheaper.

Answer Options

A. Option A: ₦660,000; Option B: ₦680,000; cheaper is Option A
B. Option A: ₦650,000; Option B: ₦690,000; cheaper is Option A
Correct Answer C. Option A: ₦650,000; Option B: ₦680,000; cheaper is Option A
D. Option A: ₦650,000; Option B: ₦680,000; cheaper is Option B
Correct Answer
C
Correct Option:
Option A: ₦650,000; Option B: ₦680,000; cheaper is Option A

About This Question

This is Gce Model Questions Vol1 2019 Commerce Question 42. It is one of the objective questions from the 2019 Gce Model Questions Vol1 Commerce examination.

Difficulty level: Medium .

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