Exam (elaborations)

DSC1630 EXAM PACK OCT/NOV 2022/2023

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DSC1630 - Introductory Financial Mathematics

Institution
University Of South Africa

DSC1630 EXAM PACK OCT/NOV 2022/2023 1. On his ninth birthday on 21 February Shelly received R420. His parents immediately invested the money in an account that earns 7,5% simple interest. The amount of money that can be withdrawn on 5 June for the same year equals [1] R411,21. [2] R428,89. [...

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Uploaded on October 25, 2022
Number of pages 73
Written in 2022/2023
Type Exam (elaborations)
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dsc1630 exam pack octnov 20222023

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DSC1630 EXAM PACK
OCT/NOV 2022/2023

,1. On his ninth birthday on 21 February Shelly received R420. His parents immediately
invested the money in an account that earns 7,5% simple interest. The amount of
money that can be withdrawn on 5 June for the same year equals
[1] R411,21.
[2] R428,89.
[3] R428,98.
[4] R429,07.
[5] none of the above.

2. An interest rate of 16,4% compounded quarterly is equivalent to a weekly compounded
interest of
[1] 16,073%.
[2] 16,098%.
[3] 16,714%.
[4] 16,741%.
[5] none of the above.

3. On Dan’s 21st birthday he notices that he is going bald. He decides that he will go for a hair
implant when he turns 30. He estimates that the implant will cost him R12 500. He starts

saving immediately by paying an amount monthly into an account earning 9,09%
interest compounded monthly. The monthly payment that Dandy Darrell makes into the
account equals
[1] R64,27.
[2] R74,63.
[3] R75,20.
[4] R115,75.
[5] none of the above.

4. At an interest rate of 14,9% per year compounded quarterly, R1 000 invested monthly
for 12 years will accumulate to
[1] R66 914,38.
[2] R385 478,48.
[3] R390 233,94.
[4] R395 600,34.
[5] none of the above.

,Questions 5 and 6 refer to the following situation:

A study was undertaken at eight garages to determine how the resale value of a car is affected
by its age. The following data was obtained:

The garage manager suspects a linear relationship between the two variables. Fit acurve of the
form y = a + bx to the data.

5. The equation is equal
to [1] y = 7,0417 − 0,001x.
[2] y = 0,001 + 7,0417x.
[3] y = 48 644,17 − 6 596,93x.
[4] y = 6 596,93 − 48 644,17x.
[5] none of the above.

6. The correlation coefficient
equals [1] 0,0000.
[2] −0,9601.
[3] 0,8450.
[4] 1,0000.
[5] none of the above.
7. Rian borrows R2 000 at a simple interest rate of 8% per annum. The amount that he owes
at the beginning of the eighth year equals
[1] R1 120,00.
[2] R3 120,00.
[3] R3 280,00.

, [4] R3 427,65.
[5] none of the above.

8. After making a down payment of R5 000 on a boat, Mr Brown also had to pay an
additionalR700 per month for it for three years. Interest was charged at 14,5% per
year compounded monthly on the unpaid balance. The original price of the boat equals
[1] R6 611,60.
[2] R20 336,44
[3] R25 336,44.
[4] R36 337,23.
[5] none of the above.

9. Joe needs R14 500 to buy a computer. Computer World is prepared to lend him the money on
condition that he signs a promissory note to pay back the money in ten months’ time.
What is the value of the promissory note if Computer World charges 28% discount?
[1] R11 116,67.
[2] R11 756,76.
[3] R17 883,33.
[4] R18 913,04.
[5] none of the above.

10. If the continuous compounding rate for a nominal rate compounded every three
months is11,832%, then the nominal rate equals
[1] 11,66%.
[2] 11,832%.
[3] 12,01%.
[4] 12,07%.
[5] 12,56%.

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