Financial Mathematics Quiz Worksheet - Math Studies 12 Year 2 Page 2
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15 Write your FULL name: ________________________________________
3.
Angela needs $4000 to pay for a car. She was given two options by the car seller.
Option A: Outright Loan
A loan of $4000 at a rate of 12% per annum compounded monthly.
(a)
Find
(i)
the cost of this loan for one year;
(2)
(ii)
the equivalent annual simple interest rate.
(2)
Option B: Friendly Credit Terms
A 25% deposit, followed by 12 equal monthly payments of $287.50.
(b)
(i)
How much is to be paid as a deposit under this option?
(1)
(ii)
Find the cost of the loan under Friendly Credit Terms.
(2)
(c)
Give a reason why Angela might choose
(i)
Option A
(ii)
Option B
(2)
To help Angela, her employer agrees to give her an interest free loan of $4000 to buy the car. The
employer is to recover the money by making the following deductions from Angela’s salary:
$x in the first month,
$y every subsequent month.
The total deductions after 20 months is $1540 and after 30 months it is $2140.
(d)
Find x and y.
(4)
(e)
How many months will it take for Angela to completely pay off the $4000 loan?
(2)
(Total 15 marks)
4.
Hassan invested 10 000 CHF at the end of 1971. The interest rate was 5% per annum. How much
interest in total would Hassan have earned at the end of the year 1999 if
(a)
he had removed the interest from his account at the end of each year;
(b)
he had not removed the interest from his account at the end of each year.
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