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XII MATHS 2 CHP 2_solution

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XII MATHS 2 CHP 2_solution

Uploaded by

MAHESH
Copyright
© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
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PADMA INSTITUTE OF KNOWLEDGE

Date : 15-01-2025 STD 12 Commerce / Arts Maths (commerce) Total Mark : 37


MATHS 2 CHP 2 OBJECTIVES SHEET

Section A

* Answer the following question. [10]

1. “A contract that pledges payment of an agreed-upon amount to the person (or


his/her nominee) on the happening of an event covered against” is technically
known as
(A) Death coverage (B) Saving for future
(C) Life insurance (D) Provident fund
Ans : Life insurance
2. Insurance companies collect a fixed amount from their customers at a fixed
interval of time. This amount is called
(A) EMI (B) Installment (C) Contribution (D) Premium
Ans : Premium
3. Following are different types of insurance.
I. Life insurance
II. Health insurance
III. Liability insurance
(A) Only I (B) Only II (C) Only III (D) All the three
Ans : All the three
4. By taking insurance, an individual
(A) Reduces the risk of an accident
(B) Reduces the cost of an accident
(C) Transfers the risk to someone else
(D) Converts the possibility of large loss to the certainty of a small one
Ans : Converts the possibility of large loss to the certainty of a small one
5. You get payments of ₹ 8,000 at the beginning of each year for five years ta 6%,
what is the value of this annuity?
(A) ₹ 34,720 (B) ₹ 39,320 (C) ₹ 35,720 (D) ₹ 40,000

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Ans : ₹ 35,720
6. In an ordinary annuity, payments or receipts occur at
(A) Beginning of each period (B) End of each period
(C) Mid of each period (D) Quarterly basis

Ans : End of each period


7. The amount of money today which is equal to a series of payments in the future
is called
(A) Normal value of the annuity (B) Sinking value of the annuity
(C) Present value of the annuity (D) Future value of the annuity
Ans : Present value of the annuity
8. Rental payment for an apartment is an example of
(A) Annuity due (B) Perpetuity
(C) Ordinary annuity (D) Installment
Ans : Perpetuity
9. _________ is a series of constant cash flows over a limited period of time.
(A) Perpetuity (B) Annuity (C) Present value (D) Future value
Ans : Annuity
10. A retirement annuity is particularly attractive to someone who has
(A) A severe illness (B) Risk of low longevity
(C) Large family (D) Chance of high longevity

Ans : Chance of high longevity

* Write true or false if statement is wrong write the true statement. [10]

11. General insurance covers life, fire, and theft.


Ans : false
12. The amount of claim cannot exceed the amount of loss.
Ans : true
13. Accident insurance has a period of five years.
Ans : false
14. Premium is the amount paid to the insurance company every month.
Ans : true
15. Payment of every annuity is called an installment.
Ans : false
16. Annuity certainly begins on a fixed date and ends when an event happens.

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Ans : true
17. Annuity contingent begins and ends on certain fixed dates.
Ans : false
18. The present value of an annuity is the sum of the present value of all
installments.
Ans : true
19. The future value of an annuity is the accumulated value of all installments.
Ans : false
20. The sinking fund is set aside at the beginning of a business.
Ans : true

* Fil in The blanks. [10]

21. An installment of money paid for insurance is called _________


Ans : premium
22. General insurance covers all risks except _________
Ans : life
23. The value of insured property is called _________
Ans : property value
24. The proportion of property value to insured is called _________
Ans : policy value
25. The person who receive annuity is called _________
Ans : Annuitant
26. The payment of each single annuity is called _________
Ans : installment
27. The intervening time between payment of two successive installments is called
as _________
Ans : payment period
28. An annuity where payments continue forever is called _________
Ans : perpetuity
29. If payments of an annuity fall due at the beginning of every period, the series is
called _________
Ans : annuity due
30. If payments of an annuity fall due at the end of every period, the series is called
annuity _________

Page 3
Ans : immediate

* Solve the following Question [7]

31. A shop is valued at ₹ 3,60,000 for 75% of its value. If the rate of premium is 0.9%,
find the premium paid by the owner of the shop. Also, find the agents
commission if the agent gets commission at 15% of the premium.
Ans : Property Value = ₹ 3,60,000
Policy Value = 75% × 3,60,000 = ₹ 2,70,000
Rate of Premium = 0.9%
∴ Amount of Premium = 0.9% × 2,70,000 = ₹ 2,430
Rate of Commission = 15%
∴ Amount of Commission = 15% × 2,430 = ₹ 364.5
32. The rate of premium is 2% and other expenses are 0.075%. A cargo worth ₹
3,50,100 is to be insured so that all its value and the cost of insurance will be
recovered in the event of total loss.
Ans : Let the Policy Value of Cargo be ₹ 100 which includes insurance and other
expenses
∴ Property Value = 100 − [2 + 0.075] = ₹97.925

If Policy Value is ₹100 , then Property Value is \text{₹} 97.925


If Property Value is ₹3, 50, 100
Then policy Value
100×3,50,100
=
97.925
= ₹3, 57, 518.51

33. The rate of premium on a policy of ₹ 1,00,000 is ₹ 56 per thousand per annum. A
rebate of ₹ 0.75 per thousand is permitted if the premium is paid annually. Find
the net amount of premium payable if the policy holder pays the premium
annually.

Ans : Policy Value = ₹1, 00, 000

Rate of Premium = ₹56 per thousand p.a


Rate of Rebate = ₹0.75 per thousand p.a
Premium is paid annually
∴ Net rate of = 56 − 0.75 = ₹55.25 per thousand p.a.
Net Amount ot Premium
1,00,000
∴ =
1000
× 55.25 = ₹5, 525

34. A person wants to create a fund of ₹ 6,96,150 after 4 years at the time of his
retirement He decides to invest a fixed amount at the end of every year in a
bank that offers him interest of 10% p.a. compounded annually. What amount
should he invest every year? [Given: 4
(1.1) = 1.4641 ]
∵ A = ₹6, 96, 150
∵ n = 4 years

∵ r = 10% p.a

r 10
∴ i = = = 0.1
100 100
C n
∵ A = [(1 + i ) − 1]

Ans : i
C 4
∴ 6, 96, 150 = [(1 + 0.1) − 1]
0.1

∴ 69, 615 = C[1.4641 − 1]

∴ 69, 615 = C × 0.4641

69, 615
∴ = C
0.4641

∴ C = ₹1, 50, 000

35. For an annuity immediate paid for 3 years with interest compounded at 10% p.a.
the present value is ₹ 24,000. What will be the accumulated value after 3 years?
[Given (1.1)
3
= 1.331]

∵ n = 3 years

∵ P = ₹24, 000
∵ r = 10% p.a.

r 10
∴ i = = = 0.1
100 100
Ans : ∵ A = P (1 + i)
n

3
∴ A = 24, 000[1 + 0.1]

3
∴ A = 24, 000 × (1.1)

∴ A = 24, 000 × 1.331

∴ A = ₹31, 944

36. A house valued at ₹ 8,00,000 is insured at 75% of its value. If the rate of
premium is 0.80%. Find the premium paid by the owner of the house. If the
agent’s commission is 9% of the premium, find the agent’s commission.

Property value = ₹8, 00, 000


Policy value = 75% × 8, 00, 000 = ₹6, 00, 000
∵ Rate of Premium = 0.80%
Ans :
∴ Amount of Premium = 0.80% × 6, 00, 000 = ₹4, 800
∵ Rate of commission = 9%

∴ Agent commission = 9% × 4800 = ₹432

37. For what amount should a cargo worth ₹ 25,350 be insured so that in the event
of a total loss, its value, as well as the cost of insurance, may be recovered when
the rate of premium is 2.5%.
Ans : Let the policy value be ₹ 100 which includes the cost of insurance and
premium
∴ Property value = 100 − 2.50 = ₹97.50

If the value of the cargo is ₹97.50 , then the policy value is ₹100 .
If the value of the cargo is ₹25, 350 , then
Policy value
100×25,350
=
97.50
= ₹26, 000

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