Neco 2020 Commerce Question 9

Practice objective / multiple choice question 9 from the 2020 Neco Commerce examination.

Neco 2020 Commerce Objective / Multiple Choice Medium Difficulty
Question 9 NECO • 2020 • COMMERCE • objective

A bank offers two savings products.\n\nProduct A: nominal annual rate 8\% compounded quarterly, with a monthly maintenance fee of \(\text{₦}500\).\nProduct B: nominal annual rate 7.5\% compounded monthly, no fees, but interest is paid at 5\% nominal compounded monthly if the balance falls below \(\text{₦}50,000\).\n\nA customer intends to deposit \(\text{₦}100,000\) for 2 years and keep the balance above the minimum throughout. Calculate the final amount for each product and indicate which product yields the higher amount.

Answer Options

A. Product A: approx ₦104,800; Product B: approx ₦117,300; Product B is better
B. Product A: approx ₦106,200; Product B: approx ₦115,500; Product A is better
C. Product A: approx ₦103,500; Product B: approx ₦112,000; Product A is better
Correct Answer D. Product A: approx ₦105,166; Product B: approx ₦116,090; Product B is better
Correct Answer
D
Correct Option:
Product A: approx ₦105,166; Product B: approx ₦116,090; Product B is better

About This Question

This is Neco 2020 Commerce Question 9. It is one of the objective questions from the 2020 Neco Commerce examination.

Difficulty level: Medium .

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