BUSINESS

MATHEMATICS
(As per the Revised Syllabus of BMS, 2016-17, Semester II,
University of Mumbai)

Dr. (Mrs.) Abhilasha S. Magar

[Link]. (MATHS), [Link]., Dip. C.P., Ph.D.
Department of Mathematics & Statistics,
Annasaheb Vartak College of Arts,
K.M. College of Commerce &
E.S. Andrades College of Science,
Vasai Road (W), Thane – 401202.

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© Author
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 Preface
I am very happy to present to “Business Mathematics” (F.Y. BMS Sem-II) to the students of
F.Y. BMS (Sem-II). The book is based on the new syllabus applicable from the current academic year
2016-2017. The text closely follows the Chapters, Topic patterns prescribed in the syllabus by
Mumbai University.
I have tried to cover the topics in sufficient depth and in simple manner with easy to understand
examples.
Special care taken to explain every new concept in minute detail so even those students, who
have not studied mathematics at the H.S.C. level will also find it easy to understand the topics covered
in the book.
I have tried to present the subject in a simple manner, making use of illustrative examples.
I would like to thank our principal Dr. Keshav N. Ghorude for providing an environment which
stimulates new thinking and innovation. I would also like to thank self-finance Incharge Dr. Aravid
Ubale and P.G. Courses Incharge Dr. G.C. Savagao for their support.
I would like to thanks my senior and my colleagues for the encouragement and continued support
for completing this book.
Special thanks to my husband Dr. Shashikant Magar and my loving sons Samarth and Shaurya.
Nothing is perfect in this world and there are always chances to improve. I shall always remain
obliged for any improvement suggestions.
A big thanks to Mr. Srivastav and all staff of Himalaya Publishing House Pvt. Ltd. for
bringing out this book in time. Special thanks to Mr. Santosh Prabhu and Mrs. Archana Gupte.

Dr. (Mrs.) Abhilasha S. Magar

 Syllabus
Modules at a Glance
Sr. No. Modules No. of Lectures
1 Elementary Financial Mathematics 15
2 Matrices and Determinants 15
3 Derivatives and Applications of Derivatives 15
4 Numerical Analysis (Interpolation) 15
Total 60
1. Elementary Financial Mathematics
● Simple and Compound Interest: Interest compounded once a year, more than once a
year, continuous, nominal and effective rate of interest.
● Annuity – Present and future value – sinking funds.
● Depreciation of Assets: Equated Monthly Installments (EMI) using flat interest rate and
reducing balance method.
● Functions: Algebraic functions and the functions used in business and economics,
Break-even and Equilibrium point.
● Permutation and Combination: Simple problems to be solved with the calculator only.
2. Matrices and Determinants
● Matrices: Some important definitions and some important results. Matrix operation
(addition, scalar multiplication, matrix multiplication, transpose of a matrix).
● Determinants of a matrix of order two or three: Properties and results of determinants.
● Solving a system of linear equations using Cramer’s rule.
● Inverse of a Matrix (up to order three) using adjoint of a matrix and matrix, inversion
method.
● Case Study: Input-Output Analysis.
3. Derivatives and Applications of Derivatives
● Introduction and Concept: Derivatives of constant function, logarithmic functions,
polynomial and exponential function.
● Rules of derivatives: Addition, multiplication, quotient.
● Second order derivatives.
● Application of Derivatives: Maxima, Minima, Average Cost and Marginal Cost. Total
revenue, Marginal revenue, Average revenue. Average and Marginal profit. Price
elasticity of demand.
4. Numerical Analysis (Interpolation)
● Introduction and Concept: Finite differences – forward difference operator – Newton’s
forward difference formula with simple examples.
● Back Difference Operator: Newton’s backward interpolation formula with simple
examples.
 Paper Pattern
Duration: 2½ Hours Maximum Marks: 75
Questions to be Set: 05
All questions are compulsory carrying 15 Marks each.

Question
Particulars Marks
No.
Q.1. Objective Questions (15 Marks)
(a) Sub-questions to be asked (10) and to be answered (any 08)
(b) Sub-questions to be asked (10) and to be answered (any 07)
(*Multiple Choice/True or False/Match the Columns/Fill in the Blanks)
Q.2. Full Length Practical Question (15 Marks)
OR
Q.2. Full Length Practical Question (15 Marks)
Q.3. Full Length Practical Question (15 Marks)
OR
Q.3. Full Length Practical Question (15 Marks)
Q.4. Full Length Practical Question (15 Marks)
OR
Q.4. Full Length Practical Question (15 Marks)
Q.5. (a) Theory Question (08 Marks)
(b) Theory Question (07 Marks)
OR
Q.5 Short Notes (15 Marks)
To be asked (05)
To be answered (03)

Note: Practical question of 15 Marks may be divided into two sub questions of 7/8 and 10/5
Marks. If the topic demands, instead of practical questions, appropriate theory question may be asked.
 Contents
1. Simple and Compound Interest 1 – 17

2. Annuity 18 – 31

3. Depreciation of Assets 32 – 36

4. Functions 37 – 58

5. Permutations and Combinations 59 – 72

6. Matrices and Determinants 73 – 102

7. Input-Output Analysis 103 – 110

8. Derivatives and Application of Derivatives 111 – 145

9. Numerical Analysis 146 – 160

 Chapter 1

Simple and Compound

Interest

INTRODUCTION
The charge for the privilege of borrowing money is called Interest. In Economics, interest is the
return to capital achieved over time.
In banking sector, interest is the extra money that a bank gives you for saving or depositing your
money with them.
Similarly, when anybody borrow money, they pay interest.
Mainly there are two types of interest:
1. Simple Interest
2. Compound Interest
Simple Interest: Simple interest is interest calculated only on the initial amount that you
invested. The interest charge is always based on the original principal.
To calculate simple interest we use formula
pn r
S. I. =
100
Where, p = Principal
n = Time (period)
r = Rate of Interest
If we calculate amount after some period we use form.
A = SI + P or A = P + SI or
pnr
A= P  or
100
 n.r 
A = P 1  
 100 
Note: Banks usually charge compound interest not simple interest
2 Business Mathematics

Some Solved Examples

Example 1: Calculate Simple interest on ` 10,000 for 3 years at 5% rate of interest per annum.
Solution: Given that
p = 10,000, n = 3 years, r = 5%
pnr
We know that S. I. =
100
10,000  3  5
 S. I. = = 1500
100
 Simple Interest is ` 1500.
Example 2: At what rate of simple interest will ` 8,000 become ` 9,250 in 3 years?
Solution: Given P = 8,000, A = 9,250, n = 3 years.
We know that
 n.r 
A = p 1  
 100 
 3r 
9,250 = 8,000 1  
 100 
9,250 3r
=1+
8,000 100
3r
1.15625 – 1 =
100
3r
 = 0.15625
100
3r = 15. 625
15.625
 r=
3
 r = 5. 2083%.
Example 3: In how many years will a sum of ` 12,300 give ` 15,000 at 8.5% rate of simple
interest?
Solution: Given P = 12,300, A = 15,000, r = 8.5%
 nr 
We know A = p1  
 100 
 8.5.n 
15,000 = 12,300 1  
 100 
15,000 8 .5 n
= 1
12,300 100
Simple and Compound Interest 3

8.5n
1.2195 – 1 =
100
0.2195 × 100 = 8.5n
21.95
n= = 2.58 years.
8 .5
Example 4: In how many years will sum of money be tripled at 20% per annum simple interest?
Solution: Given A = 3P, r = 20%
We know that
 nr 
A = P 1  
 100 
 20n 
3p = P 1  
 100 
3 = 1 + 0.2n
0.2n = 2
2
n= = 10 years.
02
Example 5: A sum of ` 25,000 is invested at 7% p.a. Find the amount after 5 years.
Solution: Given: P = 25,000, r = 7%, n = 5 years
We know that
 nr 
A = P 1  
 100 
 75
A = 25,000 1  
 100 
A = 25,000 (1.35) = 33,750.
Example 6: Find the present value at simple interest rate of 10% p.a. of ` 20,000 payable at the
end of 5 years.
Solution: Given
A = 20,000, r = 10%, n = 5 years
We know that
nr
A=p 1
100
 10  5 
20,000 = p 1  
 100 
20,000 = p(1.5)
4 Business Mathematics

20,000
p= = 13,333.3333
1 .5
 Present value (p) = ` 13,333.3333.
Example 7: Find the simple interest on ` 5000 from 3rd Jan. 2015 to 21st Oct. 2015 at 5% rate
of interest per annum.
Solution: Given P = 5,000, r = 5%, n = 3rd Jan to 21st Oct 2015
Month No. of day
January 28
February 28
March 31
April 30
May 31
June 30
July 31
August 31
September 30
October 21
 Total no. of days = 291
 291 
n=   years
 365 
 291 
5,000   5
pnr  365 
 SI = =
100 100
 SI = ` 199.3150.
Example 8: Nilu took a loan of ` 1,200 with simple interest for as many years as the rate of
interest. If she paid ` 432 as interest at the end of the loan period what was the rate of interest?
Solution: Given p = 1,200, SI = 432, r = n
We know that
pnr
SI =
100
1,200  r  r
432 =
100
43,200 = 1,200 × r2
43,200
= r2
1,200
r2 = 36
 r = 6%.
Simple and Compound Interest 5

Example 9: A sum of money amounts to ` 25,000 after 3 years and ` 25,000 after 5 years at the
same rate of simple interest. Find the rate of simple interest per annum.
Solution: S.I. for 2 years = 25,000 – 20,500 = ` 4,500
 4,500 
Now S. I. for 3 year  3 
 2 
= ` 6,750
 Principal = 20,500 – 6,750 = ` 13,750
We know that
pnr
SI =
100
13,750  3  r
6,750 =
100
 67,5,000 = 41,250r
6,75,000
 r= = 16.36%
41,250
 = 16.36%.
Example 10: Milind wants to have an interest income of ` 5,000 a year. How much he invest for
one year at 7.5%?
Solution: Given SI = ` 5,000, n = 1 year, r = 7.5%
pnr
SI =
100
p  1  7.5
5,000 =
100
5,000  100
 p=
1  7 .5

 p = ` 66,666.6666
He most invest ` 66,666.6666.
Example 11: Joel lent ` 10,000 for 3 years and ` 7,500 for 2 years, at the same rate of simple
interest. If he received ` 4,500 as interest, find the rate of simple interest.
Solution: Given
I case p = ` 10, 000, n = 3 years
II case p = 7,500, n = 2 years
SI = ` 4,500
pnr
We know that SI =
100
6 Business Mathematics

For case I
10,000  3  r
SI =
100
SI = 300 r ...(1)
For case II
SI = 7,500  2  r = 150r ...(2)
100

From (1) and (2)

SI = 300 r + 150 r
4,500 = 450 r
4,500
 r= = 10%
450
 r = 10%.
Example 12: Determine the simple interest rate applied to a principal over 25 years if the total
interest paid equals the borrowed principal.
Solution: Given that SI = P, n = 25 years
pnr
We know that SI =
100
p  25  r
P=
100
100  p
r=
25  p
 r = 4 %.
Example 13: Mr. Navin deposit ` 15,000 in one simple interest account and ` 12,000 in another
simple interest account. The interest rate on first account is 2% more than the second account. If the
total simple interest on both account is ` 950, find the rate of interest on both account.
Solution:
For I – Account
P = 15,000, n = 1 year r = 2% more than second account
pnr  2 
SI = i.e., r =   r  = 0.02 + r
100  100 
15,000  1  (0.2  r )
= by given condition
100
= 150(0.2 + r)
SI = 30 + 150r. ...(1)
Simple and Compound Interest 7

For II – Account
P = 12,000 n = 1
pnr
SI =
100
12,000  1  r
= = 120r ...(2)
100
From (1) and (2)
SI = (30 + 150r) + (120r)
950 = 30 + 270r
950 – 30 = 270r
920 = 270r
920
r= = 3.407%.
270
The interest rate of I account r = 3.407% and the interest rate of II account r = 5.407%.

EXERCISE
1. Find the amount of simple interest that is paid over a period of 3 years on a principal of
` 22,000 at S.I. Rate of 6% p. a.
(Ans.: S.I. = 3,960)
2. Calculate the total amount of an investment of ` 12,500 after six month at S.I. rate of 5% p.a.
(Ans.: S.I. = 312.5, A = 12,812.5)
3. At what rate of simple interest will ` 9,250 becomes ` 11,000 in 2 years?
(Ans.: 9.459%)
4. In how many years a principal payment to double at a S. I. rate of 10% p.a.?
(Ans.: n = 20 years)
5. In how many years will a sum of ` 18,000 gives ` 19,000 at 5.555% rate of S.I.?
(Ans.: 1 year)
6. Saket took a loan of ` 50,000 with simple Interest for as many years as the rate of interest. It
he paid ` 2,000 as interest at the end of the loan period, what was the rate of interest?
(Ans.: r = 2%)
7. Find the present value at S.I. Rate of 8% per annum of ` 35,000 payable at the end of 4 years.
(Ans.: p = ` 26,515.1515)
8. Find the S.I. on ` 6,000 from 13th Feb 2005 to 29th June 2005 at 6% rate of interest p.a.
(Ans.: S.I. = ` 134.136)
9. Mr. PK deposit ` 8,000 in first simple interest account and ` 2,000 in second simple interest
account. The interest rate on first account is 2% more than the second account. If the total
simple interest on both account is ` 950. Find the rate of interest on both account.
(Ans.: II account rate = 4.18%
I account rate = 6.18%)
8 Business Mathematics

10. Yogesh lent ` 20,000 for 5 years, and ` 16,000 for 3 years at the same rate of S.I. If he
received ` 7,400 as interest. Find the rate of S.I.
(Ans.: r = 5%)

COMPOUND INTEREST
At the end of every year interest calculated and added to the principal and also on the
accumulated interest of previous periods of deposit or loan is called as compound interest. In another
words “Interest which is calculated not only on the initial principal but also the accumulated interest of
previous period.
Compound interest may be different with simple interest where interest is not added to the
principal compound interest is standard in finance. Banks usually charge compounding interest
Formula for calculating compound Interest is given by
CI = A – P
Where, A = Amount (value) after n times
P = Principal (Initial) amount/Present value
Here we calculate A (Accumulate value) is given by
n
 r 
A = P 1   for yearly/Annually
 100 
2n
 r 
A = P 1   for Semi-yearly/Half-yearly
 200 
4n
 r 
A = P 1   for quarterly
 400 
12 n
 r 
A = P 1   for monthly
 1200 
Where, r = rate of C.I.
n = time (period)
P = Principal (Initial value)/Present value
A = Amount (Accumulate Value)
CI = A – P
n
 r 
CI = P 1   –P
 100 
 n 
r 
 CI = P 1   – 1
 100  
Simple and Compound Interest 9

Some Solved Examples

Example 1: A sum of ` 10,000 is invested at 10% per annum Compound interest. Find amount
after 3 years. Also calculate compound interest.
Solution: Given
P = 10,000, r = 10%, n = 3 years
To calculate A = ?, CI = ?
We know that
n
 r 
A = p 1  
 100 
3
 10 
A = 10,000 1  
 100 
 A = ` 13,310
Now CI = A – P
= 13,310 – 10,000
 CI = ` 3,310.
Example 2: A bank promises to give you ` 20,000 after 4 years at 8% rate of compound interest.
Find today’s investment.
Solution.: Given A = ` 20,000, n = 4 years, r = 8%
We know that
n
 r 
A = P 1  
 100 
4
 8 
20,000 = P 1  
 100 
20,000 = P (1.36048)
20,000
 P=
1.36048
 P = ` 14,700.6938
i.e., Today investment (P) = ` 14,700.6938.
Example 3: The simple interest and compound interest on a sum of money at a certain rate for 2
years is ` 2,200 and 2,850 respectively. Find the rate and the sum.
Solution: Given SI = 2,200, CI = 2,850, n = 2 years
pnr
We know that SI =
100
10 Business Mathematics

p2r
2,200 =
100
 22,000 = 2 p.r.
22,000
Pr =
2
 Pr = 1,10,000 ...(1)
 n 
r 
Also CI = P 1   – 1
 100  

 2 
r 
2,850 = P 1   – 1 ...(2)
 100  

Dividing (2) by (1)

 n 
r 
p 1   – 1
2,850  100  
= 
1,10,000 P.r.
 2r r2 
1   – 1
 100 10,000 
0.02590 = 
r
 200r  r 2 
 
 10,000 

0.02590 =
r
r ( 200  r )
0. 02590 =
10,000r
200  r
0.02590 =
10,000
 200 + r = 259
 r = 59% Put in (1)
 P (59) = 1,10,000
1,10,000
P= = 1,864.406
59
 Rate (r) = 59% and sum (P) = ` 1,864.406.
Example 4: Find the accumulated value at the end of 2 years of ` 8,000 invested at 7% p.a.
compounded half yearly.
Solution: Given, n = 2 years, P = 8,000, r = 7% p.a.
Simple and Compound Interest 11

We know that,
2n
 r 
A = P 1  
 200 
2( 2 )
 7 
A = 8,000 1  
 200 
= 8,000 (1.147523)
A = ` 9,180.184
i.e., Accumulate value after 2 years
A = ` 9,180.184.
Example 5: The difference between simple interest and compound interest on a certain sum for 3
years at 6% p.a. is ` 100. Find the sum.
Solution: Given: n = 3 years, r = 6%, CI – SI = 100
We know that CI > S.I.
Pnr
Also SI =
100
P3 6
=
100
 SI = 0.18P ...(1)
 n 
r 
CI = P 1   – 1
 100  

 3 
6 
= P 1   – 1
 100  

CI = 0.1910 P ...(2)
By given condition CI – SI = 100
(0.1910P) – ( 0.18P) = 100
100
0.011 P = 100  p =
0.011
 p = ` 9,090.9090.
Example 6: At what rate per cent per annum a sum of ` 1,225 to ` 1,600 after 2 year compounded
annually?
Solution: Given
P = 1,225, A = 1,600, n = 2 years
We know that
12 Business Mathematics

n
 r 
A = P 1  
 100 
2
 r 
1,600 = 1,225 1  
 100 
2
1,600  r 
= 1  
1,225  100 
2 2
 40   r 
  = 1  
 35   100 
2
 40  1,600
Since   =
35
  1,225
40 r
 = 1
35 100
r
1.1428 – 1 =
100
 r = 0.1428 × 100
 r = 14.285%.
Example 7: A sum of ` 1,000 to ` 1,728 in 3 years compound interest. Find the rate.
Solution: Given P = 1,000, A = 1,728, n = 3 years
We know that
n
 r 
A = P 1  
 100 
3
 r 
1,728 = 1,000 1  
 100 
3
1,728  r 
= 1  
1,000  100 
3 3 3
 12   r   12  1,728
  = 1     =
 10   100   10  1,000
12 r
 =1+
10 100
r
1.2 – 1 =
100
 r = 0. 2 × 100  r = 20%.
Simple and Compound Interest 13

Example 8: The difference between S.I. & CI. on an account of ` 32,000 for 2 years is ` 150.
Find the rate per cent per annum.
Solution.: Given p = 32,000, n = 2 years, CI – SI = 150
We know that
Pnr
SI =
100
32,000  2  r
=
100
SI = 640r ...(1)
 n 
r 
Also CI = P 1   – 1
 100  

 2 
r 
= 32,000 1   – 1
 100  

 2r r2 
= 32,000 1   – 1
 100 10,000 
 200 r  r 2 
= 32,000  
 10,000 
= 3.2 [200r + r2]
CI = 640r + 3.2r 2 ...(2)
By given condition
CI – SI = 150  From (1) and (2)
2
(640r + 3.2r ) – (640r) = 150
 3.2 r2 = 150
150
r2 =
3 .2
r2 = 46.875
r = 6.846%.
Example 9: In how many years would ` 23,500 become ` 29,750 at 6% p.a. compound interest?
Solution.: Given P = 23,500, A = 29,750, r = 6%
We know that
n
 r 
A = p 1  
 100 
14 Business Mathematics

n
 6 
29,750 = 23,500 1  
 100 
29,750
= (1.06) n
23,500
(1.26) = (1.06)n
(1.06)4 = (1.06) n
 n = 4 years.
Example 10: The compound interest on ` 30,000 at 7% p.a. is ` 4,347. Find period in years.
Solution: Given P = 30,000, r = 7%, CI = 4,347
We know that CI = A – P
 A = CI + P
A = 4,347 + 30,000
A = 34,347.
n
 r 
Now A = P 1  
 100 
n
 7 
34,347 = 30,000 1  
 100 
34,347
= (1.07)n
30,000
(1.1449) = (1.07)n
(1.07)2 = (1.07)n
 n = 2 years.
Example 11: If you deposit ` 5,000 in an account paying 8% annual interest compounded
quarterly for 2 years. Find the amount after 2 years.
Solution: Given p = ` 5,000, r = 8% p.a. comp. quarterly
n = 2 years.
we know that, for compounded quarterly
4n
 r 
A = P 1  
 100 
4 (2 )
 8 
= 5,000 1  
 400 
= 5,000 (1.1716)
A = 5,858
Amount after 2 years A = ` 5,858.
Simple and Compound Interest 15

Example 12: The simple interest on a sum of money for 4 years at 5.5% p.a. is ` 8,570. what will
be the compound interest on the same at the same rate for the same period compound annually?
Solution: Given n = 4 years, r = 5.5%, SI = ` 8,570
We know that,
Pnr
SI =
100
p  4  5 .5
8,570 =
100
8,570  100
P =
4  5 .5
 P = ` 38,954.5454
 n 
r 
Now CI = P 1   – 1
 100  

 4 
5 .5 
= 38,954.5454 1   – 1
 100  

= 9,303.3056
 CI = ` 9,303.3056.
Example 13: Find the difference between S.I. and C.I. on ` 5,050 for two year at 10% p.a.
Pnr
Solution: We know that SI =
100
5,050  2  10
=
100
SI = 1,010 ...(1)
Also
2
 r  
CI = P  1   – 1
 100  
2
 10  
= 5,050  1   – 1
 100  
= 5,050 [0.21]
CI = 1,060.5 ...(2)
From (1) and (2)
CI – SI = 1,060.5 – 1010
CI – SI = ` 50.5.
16 Business Mathematics

Example 14: The difference between S.I. and C.I. on a ceratin sum of money for 2 years at 5%
p.a. is ` 1 find the sum.
Solution: Given n = 2 year, r = 5% CI – SI = ` 1
Pnr P25
We know that SI = =
100 100
 SI = 0. I P ...(1)
 n 
r 
Also CI = P 1   – 1
 100  

 2 
5 
= P 1   – 1
 100  

CI = 0.1025P ...(2)
By given cond. CI – SI = 1
0.1025P – 0.1P = 1
0.0025P = 1
1
P = = 400  The sum (P) = ` 400.
0.025

EXERCISE
1. Calculate the amount after 5 years a principal of ` 18,000 invested at 7% per annum
compound interest.
(Ans.: A = ` 25,245.93115)
2. A bank promises to give you ` 1,00,000 after 3 years at the rate of 8% per annum compound
interest. Find todays investment. Also calculate compound interest
(Ans.: P = ` 79,383.22 CI = 20,616.7759)
3. At what rate per cent per annum a sum of ` 3,600 to ` 2,500 after 2 years compounded
annually?
(Ans.: r = 20%)
4. Find rate of interest if a sum of ` 1,000 to ` 1,360.48 after 4 years compound interest.
(Ans.: r = 8% p.a.)
5. In what time will ` 2,000 becomes ` 2,662 at 10% p.a. compounded annually?
(Ans.: n = 3 years.)
6. How many time periods in year are needed to increase ` 3,000 at 8.5% p.a. compound
interest to ` 4,500.
(Ans.: n - 5 years (approximately)
7. Find the difference between S.I. and C.I. at 6% p.a. on the sum of ` 10,000 after 4 years.
(Ans.: CI – SI = 2,624.7696 – 2,400 = ` 2,24.7696)
Simple and Compound Interest 17

8. Find the C.I. on ` 7,500 at 4% p.a. for 2 years compounded annually.

(Ans.: CI = 612)
9. How much money would you need to deposit today at 8% p.a. compounded monthly to have
` 40,000 in the account after 2 years.
(Ans.: P = ` 34,104.085)
10. The difference between compound interest and simple interest on an account of ` 14,000 for
2 years is ` 120. Find the rate per cent.
(Ans.: r = 9.258%)
11. The simple interest and compound interest on a sum of money at a certain rate for 2 years is
` 5,500 and 6,600 respectively. Find the rate and sum.
(Ans.: r = 40% P = ` 6,875)

OBJECTIVE QUESTIONS
State whether the following Statement is True/False
[Link] interest is the interest earned not only on the original principal.
[Link] sum of principal and the interest is called amount.
[Link] financial analysis we often come across uneven cash flow streams.
[Link] interest for a principal is less than the simple interest on the same amount.
[Link] process of discounting used for calculating the present value is simply the inverse of
compounding.
Ans.: 1. False, 2. True, 3. True, 4. False, 5. True.

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