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DSC1630 Semester 2 Assessment 1 Answers/ memo
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DSC1630 Introductory to financial mathematics assessment 1 memo of answers. 100% Guaranteed.
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1. Kariem deposits R900 into a savings account paying 6,5% interest per year,compounded quarterly. After three and a half years he withdraws R1 000 from
the account and deposits it into a second account paying 11% simple interest
per year. How much is the total amount accrued in the first account two
years after withdrawing the R1 000? The correct answer, rounded to the
nearest rand, is. C. R145
2. Kariem deposits R900 into a savings account paying 6,5% interest per year,
compounded quarterly. After three and a half years he withdraws R1 000 from the
account and deposits it into a second account paying 11% simple interest per
year.
A number of years after Kariem deposited the R1 000 into the second account,
the accrued amount in the second account is R1 605. The time (correct to two
decimal places) the money was invested for, is D. 5,50 years
3. An effective rate of 29,61% corresponds to a nominal rate, compounded weekly,
of C. 26.00%
4. An investment of R20 000 accumulated to R45 200. If the applicable simple
interest rate is 12% per year, then the time under consideration is A. 10,50 years
5. Anna won R165 000 and decided to deposit 65% of this amount in an account
earning 8,25% interest per year, compounded every four months. The
accumulated amount after five years is A. R161110,84
6. Calculate the present value of a loan if R12 000 is due in five years’ time, at a
simple discount rate of 15% per annum. D. R3000,00
7. Charles borrowed R500 from Grace four months ago and R700 nine months ago.
He wants to liquidate these obligations with a single payment in 12 months’ from
now. If a simple interest rate of 11% per year, is charged on all the amounts, the
amount he will pay Grace in 12 months’ from now is B. R1408,08
8. Emily receives R1 500,00 from the bank now that charge 10,5% simple discount
per annum. She has to pay back the bank an amount of R1 893,75 in a few
months’ time. The number of months after which Emily pays back the loan,
rounded to one decimal place, is A. 23,8
9. Having received a large inheritance, Joseph’s parents wish to establish a trust for
his university education. They need an estimated R70 000, 15 years from now.
The amount they should set aside in the trust now, if they invest the money at
18,5% per year compounded quarterly, is B. R4644,83
10. Michael wants to buy a double door refrigerator. He has five interest rates to
choose from if he borrows the money from the bank. The cheapest option for him
is C. 30% per year, compounded semi-annually.
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