MPSC ATP · Topic 17

17 MPSC ATP Valuation Tables questions with answers

6 questions from MPSC ATP Mock Test 1 with answers and MPSC ATP 2022 question paper with answers. Try each one, then tap Show answer.

Previous-paper questions are as in the original paper. Medha AI wrote the answers and explanations.

Interests in land

  1. Q1 Mock Test 1, Q91

    Match the type of mortgage (Column A) with its feature (Column B) under section 58 of the Transfer of Property Act, 1882:

    (a) Simple mortgage (b) Usufructuary mortgage (c) English mortgage (d) Mortgage by deposit of title deeds

    (i) Mortgagee is put in possession and receives rents/profits in lieu of interest

    (ii) Property is transferred absolutely to the mortgagee subject to re-transfer on repayment

    (iii) Mortgagor binds himself personally and gives the mortgagee a right to have the property sold, without delivering possession

    (iv) Title deeds are delivered to a creditor as security (equitable mortgage)

    1. A(a)-(iii), (b)-(i), (c)-(ii), (d)-(iv)
    2. B(a)-(i), (b)-(iii), (c)-(iv), (d)-(ii)
    3. C(a)-(ii), (b)-(i), (c)-(iii), (d)-(iv)
    4. D(a)-(iii), (b)-(iv), (c)-(ii), (d)-(i)
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    Answer A. (a)-(iii), (b)-(i), (c)-(ii), (d)-(iv)

    Section 58(b) simple mortgage: personal covenant plus power of sale without possession; 58(d) usufructuary: possession and rents to mortgagee; 58(e) English: absolute transfer with proviso for re-transfer; 58(f): deposit of title deeds (equitable mortgage).

    Source: Transfer of Property Act 1882, s.58(b),(d),(e),(f)

Valuation tables

  1. Q2 Mock Test 1, Q92

    Which of the following interests is most appropriately valued using a dual-rate years' purchase?

    1. AA leasehold interest with 20 years unexpired
    2. BA perpetual annuity from government securities
    3. CAgricultural land held freehold
    4. DA freehold interest let in perpetuity at a secured ground rent
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    Answer A. A leasehold interest with 20 years unexpired

    Dual-rate YP is used for terminable (wasting) interests such as leaseholds, where the investor must recover his capital through a sinking fund by the end of the term; perpetual freehold incomes need no sinking fund and use the single-rate perpetuity YP.

    Source: Valuation textbook: application of dual-rate tables

Numericals

  1. Q3 Mock Test 1, Q93

    The amount of Re.1 per annum (invested at the end of each year) at 5 per cent for 2 years is

    1. A2.000
    2. B2.103
    3. C2.050
    4. D1.907
    Show answerHide answer

    Answer C. 2.050

    Amount of Re.1 p.a. = ((1+i)^n - 1)/i = (1.1025 - 1)/0.05 = 2.05. Check: Re.1 at end of year 1 grows to 1.05, plus Re.1 at end of year 2 = 2.05.

    Source: Formula: Amount of Re.1 p.a. = ((1+i)^n - 1)/i

Years' Purchase

  1. Q4 ATP 2022, Q75

    The capitalised value required to be paid once and for all in order to receive an annual income of Re. 1 for a specified period of time at a specified rate of return is

    1. ASinking fund
    2. BYears' Purchase
    3. CAnnuity
    4. DMarket value
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    Answer B. Years' Purchase

    Years' Purchase is the present value of Re. 1 per annum for n years (or in perpetuity) at a given rate; capital value = net income x YP. (Answer matches the official MPSC final key, 26-12-2022.)

    Source: Valuation tables - Years' Purchase (PV of Re.1 p.a.)

Annuity

  1. Q5 ATP 2022, Q78

    The net annual payment (return on investment) for the capital invested in an immovable property is

    1. APresent value
    2. BCapital value
    3. CSinking fund
    4. DAnnuity
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    Answer D. Annuity

    An annuity is the series of equal annual payments receivable in return for a capital sum invested; the net annual return on capital invested in property is thus treated as an annuity. (Answer matches the official MPSC final key, 26-12-2022.)

    Source: Valuation tables - annuity

Present value of Re.1

  1. Q6 ATP 2022, Q80

    What is the present value of Re. 1 receivable at the end of 'n' years at 'i' rate of interest per annum?

    1. A(1+i)^n - 1
    2. B((1+i)^n - 1)/i
    3. Ci/((1+i)^n - 1)
    4. D1/(1+i)^n
    Show answerHide answer

    Answer D. 1/(1+i)^n

    Official MPSC final key: (4). Present value of Re.1 due after n years at rate i = 1/(1+i)^n. Option text reconstructed from a garbled scan; the correct formula is placed at option (4) as per the official key.

    Source: Valuation tables - Present value of Re.1

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