Statistics & Applications

Financial Math

Medium

applied

Which of the following statements are correct?

(A) In the sinking fund a fixed amount at regular intervals is deposited.

(B) Sinking fund is a long-term account which can be closed any time.

(C) In a saving account, any amount, any time can be deposited.

(D) Sinking fund can be used only for the purpose it was created.

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (C) and (D) only

(B), (C) and (D) only

(B) and (C) only

✅ Correct Option: 2

A sinking fund is a special savings account where money is set aside regularly for one specific goal (like buying equipment or paying off debt). A savings account is a regular, flexible bank account where money can be saved without restrictions.

Statement (A): In the sinking fund a fixed amount at regular intervals is deposited.

This is correct. Sinking funds operate by depositing the same amount at regular intervals until the target is reached. For example, to save ₹50,000 in 2 years, ₹2,000 would be deposited every month.

Statement (B): Sinking fund is a long-term account which can be closed any time.

This is incorrect. While sinking funds are long-term accounts, they cannot be closed at any time. These accounts are committed with a specific purpose and closing them prematurely defeats that purpose.

Statement (C): In a saving account, any amount, any time can be deposited.

This is correct. Savings accounts are flexible - deposits of any amount can be made at any time without restrictions.

Statement (D): Sinking fund can be used only for the purpose it was created.

This is correct. This is the fundamental rule of sinking funds. If created for buying equipment, it can only be used for buying equipment. If created for debt repayment, it can only be used for debt repayment.

Statement A - Correct

Statement B - Incorrect

Statement C - Correct

Statement D - Correct

The correct statements are (A), (C) and (D) only.

2026: 18 May Shift 2

A car costing ₹ 5,00,000 has a useful life of 15 years. The estimated scrap value is ₹ 50,000. The annual depreciation using the straight line method is

2026: 21 May Shift 2

Which of the following pointers are the characteristics of sinking fund?

A. It is a long term account which can be closed any time.

B. It is set up for a particular upcoming expense.

C. It can be used in any emergency.

D. It can be used only for the purpose it was created.

Choose the correct answer from the options given below:

2025: 3 June Shift 1

A man plans to take a housing loan of Rs 99,53,000 from a bank costing 18% per annum compounded monthly. The loan is to be paid back in 30 years in equal monthly installments (EMI). The EMI by reducing balance method is:

[Given $(1.015)^{-360} = 0.0047$ ]

2025: 14 May Shift 1

A person invested ₹ 10000 in a stock of a company for 6 years. The value of his investment at the end of each year is given in the following table:

2018	2019	2020	2021	2022	2023
₹ 11000	₹ 11500	₹ 13000	₹ 11800	₹ 12200	₹ 14000

The compound annual growth rate (CAGR) of his investment is:

[Given $(1.4)^{1/6} = 1.058$ ]

2026: 19 May Shift 1

Jemina invested ₹ 50,000 in a mutual fund in 2019. The value of the mutual fund increased to ₹ 80,000 in 2024. The percentage of CAGR (Compound Annual Growth Rate) of her investment is: [Use $(1.6)^{1/5} = 1.098$ ]

2025: 22 May Shift 2

Rahul invested ₹ 20000 in a mutual fund in year 2018. If the value of mutual fund increased to ₹ 32000 in year 2023. Then the compound annual growth rate of his investment is: $[given \, that(1.6)^{1/5} = 1.098]$

Solution

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