100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
DSC1630 Assignment 01 Semester 01 2022 Solutions $2.76
Add to cart
Quickly navigate to
Preview
  2.  
  3. University Of South Africa (Unisa)
  4.  
  5. DSC1630 - Introductory Financial Mathematics (DSC1630)

Other

DSC1630 Assignment 01 Semester 01 2022 Solutions
 21 views  1 purchase
  • Course
  • DSC1630 - Introductory Financial Mathematics (DSC1630)
  • Institution
  • University Of South Africa (Unisa)

This document includes the assignment questions, solutions with workings.

Preview 2 out of 21  pages

Document information

  • January 21, 2022
  • 21
  • 2021/2022
  • Other
  • Unknown

Subjects

  • dsc1630
  • dsc
  • dsc1630 2022
  • dsc1630 assignment 1
  • dsc1630 assignment 01
  • an investment of r20 000 accumulated to r45 200 if the applicable simple interest rate is 12 per year
  • then the time under conside

Written for

  • University of South Africa (Unisa)
  • DSC1630 - Introductory Financial Mathematics (DSC1630)
All documents for this subject (235)

Seller

avatar-seller
aj107

Reviews received

Content preview

DSC1630

Introductory Financial Mathematics

Department of Decision Sciences

Assignment 01 for Semester 01 2022

Unique assignment number: 189377
Due Date: 1 March 2022




Question 1

Patric borrows money from Zanele at a simple discount rate of 9,75% per annum. He must
pay him R35 000 in 27 months’ time. The amount of money that he receives from Zanele
now is

[1] R27 321,88.
[2] R44 835,87.
[3] R28 389,51.
[4] R42 678,13.

Answer:

𝑃 is the principal or total amount borrowed (in rand) which is subject to interest (𝑃 is also
known as the present value [𝑃𝑉] of the loan)

𝑟 is the rate of interest, that is, the fraction of the principal that must be paid each period
(say, a year) for the use of the principal (also called the period interest rate)

𝑡 is the time in years, for which the principal is borrowed.

, This is a simple discount calculation as the term discount rate is found in the question. The
formula for simple discount is 𝑃 = 𝑆(1 − 𝑑𝑡).

Given are the future value of the loan (𝑆) which is R35 000, the time period which equals 27
months and the discount rate (𝑑) of 9,75%. The time period that we use must always be in
years.

As the given time is in months we change it to a fraction of a year by dividing the months by
27
the number of months in a year which is 12. Thus 𝑡 = 12
Now we need to determine the present value of the loan. Thus

On a timeline:




𝑆 = 𝑅35 000
27
𝑡=
12
𝑑 = 0,0975

So,

𝑃 = 𝑆(1 − 𝑑𝑡)
27
𝑃 = 35 000 (1 − 0,0975 × )
12
𝑃 = 𝑅27 321,88
Patric receives R27 321,88 from Zanele now.

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller aj107. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $2.76. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

52355 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$2.76  1x  sold
  • (0)
Add to cart
Added