Mary sought for advice from a friend, a manager of first bank who advised him to save 12,000 annually with first bank at the same interest rate for the same duration as union bank and have the present value of his savings a 44,914.30 it is however disclosed that the present value of the 6th year savings in access bank at the same rate is 26,667. You are required to compute Annual savings in union bank Duration of savings in union bank Annual interest rate?

Explore Courses UPSC Exam UPSC Test Series Free Notes EduRev Infinity

Open App

Commerce Exam > Commerce Questions > Mary sought for advice from a friend, a manag...

Join the Discussion on the App

Mary sought for advice from a friend, a manager of first bank who advised him to save 12,000 annually with first bank at the same interest rate for the same duration as union bank and have the present value of his savings a 44,914.30 it is however disclosed that the present value of the 6th year savings in access bank at the same rate is 26,667. You are required to compute Annual savings in union bank Duration of savings in union bank Annual interest rate?

Join for Free

Join for Free

Most Upvoted Answer

Mary sought for advice from a friend, a manager of first bank who advi...

Computation of Annual Savings, Duration of Savings, and Interest Rate

Annual Savings

To compute the annual savings, we need to use the present value formula. We know that the present value of Mary's savings in First Bank is 44,914.30 and she saves 12,000 annually. Therefore, the annual savings can be computed as follows:

PV = (PMT / r) x (1 - (1 + r)^-n)

where PV is the present value, PMT is the annual savings, r is the interest rate, and n is the number of years.

Substituting the values we know, we get:

44,914.30 = (12,000 / r) x (1 - (1 + r)^-n)

Using trial and error or a financial calculator, we can solve for r to get the annual interest rate.

Duration of Savings

Since Mary is saving the same amount with the same interest rate in both First Bank and Union Bank, we can assume that the duration of her savings in Union Bank is also 6 years. Therefore, the duration of savings in Union Bank is 6 years.

Annual Interest Rate

Using the present value formula and the given present value of Mary's savings in First Bank, we can solve for the annual interest rate. Once we know the interest rate, we can use it to compute the annual savings in Union Bank.

Therefore, the annual interest rate can be computed as follows:

PV = (PMT / r) x (1 - (1 + r)^-n)

44,914.30 = (12,000 / r) x (1 - (1 + r)^-6)

Using trial and error or a financial calculator, we can solve for r to get the annual interest rate. Once we know the interest rate, we can use it to compute the annual savings in Union Bank.

Answered by Pj Commerce Academy · View profile

Attention Commerce Students!

To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.

Chapter Notes for Commerce

Economics Class 12

Economics Class 11

NCERT Books & Solutions for Commerce

View all answers Start learning for free

Explore Courses for Commerce exam

Similar Commerce Doubts

Direction: Read the following text and answer the below questions :Best Textiles Ltd. is a big company. Managing many employees at the same moment is a challenge which this company always faces. Since the company has many departments it is necessary for the company to ensure unity of action among various departments. The various departments are human resources, marketing, finance, operations and sales. The top-level managers coordinate with all middle-level managers. The middle-level managers coordinate simultaneously with top as well as lower-level managers. The lower-level managers coordinate with middle-level managers and the workers. The employees are always concerned about the company and are a useful resource to their organisation. Though they have diverse interests and have to perform different activities, the management ensures that the efforts of the employees should be given a focus so as to achieve the organisational goals.The different departments have their own interests but due to proper coordination, conflict of interest between departments is minimized to zero. When it comes to the employees, the organisation shows its concern. The career of employees is shown a developmental path through proper training modules and job enrichment. Sanjeev is a manager who takes care of all the duties and responsibilities to be assigned to his employees in the department. He uses all sources to develop a proper communication with them and leaves no attempt to motivate them. This year the company has decided to give the best manager award to Sanjeev for his contribution to the organisation.Which type of objective is fulfilled here ?

View answer

Direction: Read the following text and answer the below questions :Best Textiles Ltd. is a big company. Managing many employees at the same moment is a challenge which this company always faces. Since the company has many departments it is necessary for the company to ensure unity of action among various departments. The various departments are human resources, marketing, finance, operations and sales. The top-level managers coordinate with all middle-level managers. The middle-level managers coordinate simultaneously with top as well as lower-level managers. The lower-level managers coordinate with middle-level managers and the workers. The employees are always concerned about the company and are a useful resource to their organisation. Though they have diverse interests and have to perform different activities, the management ensures that the efforts of the employees should be given a focus so as to achieve the organisational goals.The different departments have their own interests but due to proper coordination, conflict of interest between departments is minimized to zero. When it comes to the employees, the organisation shows its concern. The career of employees is shown a developmental path through proper training modules and job enrichment. Sanjeev is a manager who takes care of all the duties and responsibilities to be assigned to his employees in the department. He uses all sources to develop a proper communication with them and leaves no attempt to motivate them. This year the company has decided to give the best manager award to Sanjeev for his contribution to the organisation.At which level of management does Sanjeev work?

View answer

Direction: Read the following text and answer the below questions :Best Textiles Ltd. is a big company. Managing many employees at the same moment is a challenge which this company always faces. Since the company has many departments it is necessary for the company to ensure unity of action among various departments. The various departments are human resources, marketing, finance, operations and sales. The top-level managers coordinate with all middle-level managers. The middle-level managers coordinate simultaneously with top as well as lower-level managers. The lower-level managers coordinate with middle-level managers and the workers. The employees are always concerned about the company and are a useful resource to their organisation. Though they have diverse interests and have to perform different activities, the management ensures that the efforts of the employees should be given a focus so as to achieve the organisational goals.The different departments have their own interests but due to proper coordination, conflict of interest between departments is minimized to zero. When it comes to the employees, the organisation shows its concern. The career of employees is shown a developmental path through proper training modules and job enrichment. Sanjeev is a manager who takes care of all the duties and responsibilities to be assigned to his employees in the department. He uses all sources to develop a proper communication with them and leaves no attempt to motivate them. This year the company has decided to give the best manager award to Sanjeev for his contribution to the organisation.Which importance of management has been highlighted above ?

View answer

Direction: Read the following text and answer the below questions :Best Textiles Ltd. is a big company. Managing many employees at the same moment is a challenge which this company always faces. Since the company has many departments it is necessary for the company to ensure unity of action among various departments. The various departments are human resources, marketing, finance, operations and sales. The top-level managers coordinate with all middle-level managers. The middle-level managers coordinate simultaneously with top as well as lower-level managers. The lower-level managers coordinate with middle-level managers and the workers. The employees are always concerned about the company and are a useful resource to their organisation. Though they have diverse interests and have to perform different activities, the management ensures that the efforts of the employees should be given a focus so as to achieve the organisational goals.The different departments have their own interests but due to proper coordination, conflict of interest between departments is minimized to zero. When it comes to the employees, the organisation shows its concern. The career of employees is shown a developmental path through proper training modules and job enrichment. Sanjeev is a manager who takes care of all the duties and responsibilities to be assigned to his employees in the department. He uses all sources to develop a proper communication with them and leaves no attempt to motivate them. This year the company has decided to give the best manager award to Sanjeev for his contribution to the organisation.Which characteristic of coordination has been highlighted in the above case?

View answer

A and B are partners from 1st April, 2017 without any partnership agreement and they bring capital of 3,500 and 2,000 respectively. On 31st Oct., 2017, A advances * 750 by way of loan to the firm without any agreement as to interest. The profit and loss account for the year discloses a profit of 1,350-75 but the partners can not agree upon the question of interest and division of profit. You are required to divide the profit between them giving reasons for your method.?

View answer

Top Courses for CommerceView all

Chapter Notes for Commerce

Economics Class 12

Economics Class 11

NCERT Books & Solutions for Commerce

Economics for CBSE Class 12 Board Examinations

Top Courses for Commerce

View all

Share with a Friend

Answer this doubt

Question Description
Mary sought for advice from a friend, a manager of first bank who advised him to save 12,000 annually with first bank at the same interest rate for the same duration as union bank and have the present value of his savings a 44,914.30 it is however disclosed that the present value of the 6th year savings in access bank at the same rate is 26,667. You are required to compute Annual savings in union bank Duration of savings in union bank Annual interest rate? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Mary sought for advice from a friend, a manager of first bank who advised him to save 12,000 annually with first bank at the same interest rate for the same duration as union bank and have the present value of his savings a 44,914.30 it is however disclosed that the present value of the 6th year savings in access bank at the same rate is 26,667. You are required to compute Annual savings in union bank Duration of savings in union bank Annual interest rate? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mary sought for advice from a friend, a manager of first bank who advised him to save 12,000 annually with first bank at the same interest rate for the same duration as union bank and have the present value of his savings a 44,914.30 it is however disclosed that the present value of the 6th year savings in access bank at the same rate is 26,667. You are required to compute Annual savings in union bank Duration of savings in union bank Annual interest rate?.

Solutions for Mary sought for advice from a friend, a manager of first bank who advised him to save 12,000 annually with first bank at the same interest rate for the same duration as union bank and have the present value of his savings a 44,914.30 it is however disclosed that the present value of the 6th year savings in access bank at the same rate is 26,667. You are required to compute Annual savings in union bank Duration of savings in union bank Annual interest rate? in English & in Hindi are available as part of our courses for Commerce. Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.

Here you can find the meaning of Mary sought for advice from a friend, a manager of first bank who advised him to save 12,000 annually with first bank at the same interest rate for the same duration as union bank and have the present value of his savings a 44,914.30 it is however disclosed that the present value of the 6th year savings in access bank at the same rate is 26,667. You are required to compute Annual savings in union bank Duration of savings in union bank Annual interest rate? defined & explained in the simplest way possible. Besides giving the explanation of Mary sought for advice from a friend, a manager of first bank who advised him to save 12,000 annually with first bank at the same interest rate for the same duration as union bank and have the present value of his savings a 44,914.30 it is however disclosed that the present value of the 6th year savings in access bank at the same rate is 26,667. You are required to compute Annual savings in union bank Duration of savings in union bank Annual interest rate?, a detailed solution for Mary sought for advice from a friend, a manager of first bank who advised him to save 12,000 annually with first bank at the same interest rate for the same duration as union bank and have the present value of his savings a 44,914.30 it is however disclosed that the present value of the 6th year savings in access bank at the same rate is 26,667. You are required to compute Annual savings in union bank Duration of savings in union bank Annual interest rate? has been provided alongside types of Mary sought for advice from a friend, a manager of first bank who advised him to save 12,000 annually with first bank at the same interest rate for the same duration as union bank and have the present value of his savings a 44,914.30 it is however disclosed that the present value of the 6th year savings in access bank at the same rate is 26,667. You are required to compute Annual savings in union bank Duration of savings in union bank Annual interest rate? theory, EduRev gives you an ample number of questions to practice Mary sought for advice from a friend, a manager of first bank who advised him to save 12,000 annually with first bank at the same interest rate for the same duration as union bank and have the present value of his savings a 44,914.30 it is however disclosed that the present value of the 6th year savings in access bank at the same rate is 26,667. You are required to compute Annual savings in union bank Duration of savings in union bank Annual interest rate? tests, examples and also practice Commerce tests.

Explore Courses for Commerce exam