Chapter 3 Investments and loans review quiz solutions

Question Solution

FV = PV (1+ r) n
= $18,000(1+ 0.049)5
1 = $22,863.88074...
» $22,863.88
Future value is $22 863.88
Lily I = Prn
= $50,000 ´ 0.03 ´ 4
= $6,000
Ryan A = P(1+ r)
n

0.03 4´12
= $50,000(1+ )
12
2
= $56,366.40105...
» $56,366.40
I = A- P
= $56,366 - $50,000
= $6,366
Ryan has earned an extra $366.
12
æ 0.08 ö
A = $1600 ´ ç 1+ ÷ I = $2029.19 - $1600
3 è 4 ø
= $429.19
= $2029.19
A = P(1+ r) n
= $3500(1+ 0.065)4
4a = $4502.632227...
= $4502.63
Blake has $4502.63 after 4 years.
I  A P
 4502.63  3500
4b
 $1002.63
Blake earns $1002.63 in interest.

A = P(1+ r) n
1
æ 0.039 ö
= $35,000 ´ ç 1+
5a è 2 ÷ø
= $35,682.50
Balance after 6 months is $35,682.50

© G K Powers 2018 Published by Cambridge University Press 1

Chapter 3 Investments and loans review quiz solutions
A = P(1+ r) n
20
æ 0.039 ö
= $35,000 ´ ç 1+ » $51,500.642
è 2 ÷ø
5b
I = A- P
= $51,500.64 - $35,000 = $16,500.64
Interest earned after 10 years is $16,500.64.

FV = PV (1+ r) n
1.5´12
æ 0.048 ö
= $12,000 ´ ç 1+ ÷
6 è 12 ø
= $12,894.01219...
» $12,894
2018 to 2029 is 11 years
FV = PV (1+ r) n
= $695 ´ (1+ 0.08)11
7
= 1620.489103...
» $1620
Future value is $1620
Current value = 3000 ´ $2.25
8a
= $6,750
Annual dividend
Dividend yield = ´ 100%
Market price
$0.07
8b = ´ 100%
$2.25
= 3.111111... » 3%
Dividend yield is 3%
Dividend  1500  $0.24
9a  $360
Daniel receives a dividend of $360.

0.24
Dividend yield = ´100%
1.80
9b
= 13.3333...% » 13.3%
Dividend yield is 13.3 %

S = V0 (1- r) n
= $35,000 ´ (1- 0.15) 4
10 = $18,270.21875
» $18,270.22
Salvage value of the ute is $18,270.22.

© G K Powers 2018 Published by Cambridge University Press 2

Chapter 3 Investments and loans review quiz solutions

S = V0 (1- r) n
= $83,700 ´ (1- 0.16)4
= $41,671.83
11 Depreciation = S - V0
= $83,700 - $41,671.83
= $42,028.17
Depreciation is $42 028.17

S = V0 (1- r) n
= $19,990(1- 0.18)3
12 = $11,021.84632...
» $11,022
Salvage value is $11 022

S = V0 (1- r) n

13
= $6200 ´ (1- 0.18)4
= $2803.15... » $2803
Salvage value is $2803
A = P(1+ r) n
24
æ 0.06 ö
= $4800 ç 1+
è 12 ÷ø
14
» $5410.37
Instalments = $5410.37 ¸ 24
» $225.43
Total paid = $485.38×36
15a = $17 473.68
Thomas is required to pay back $17 473.68
Total Interest = $17,473.68 - $14,000
= $3,473.68
$3473.68 ¸ 3
15b Interest rate = ´100
$14,000
= 8.2706666... » 8.27%
Flat rate of interest is 8.27%

Total paid = $2150×26×7

16a = $391 300
 Levi is required to pay $391 300 for the loan.

© G K Powers 2018 Published by Cambridge University Press 3

Chapter 3 Investments and loans review quiz solutions
Interest = $391 300 − $246 000
16b = $145 300
 Interest paid is $145 300

15.7%
Daily Interest Rate =
365
17a
= 0.04301369863...
» 0.0430%

Interest = $1240 ´ 0.0430% ´12 (12 days)

= $6.400438356... » $6.40
17b Total Paid = $1240 + $6.40
= $1246.40
Total amount paid is $1246.40

𝐹𝑉 = 𝑃(1 + 𝑟)𝑛
0.194 30
= $7895× (1 + )
18 365
= $8021.8624. . .
≈ $8021.86
Jayden owes $8021.86

𝐹𝑉 = 𝑃𝑉(1 + 𝑟)𝑛
0.07 15
= $4300× (1 + )
100
= $4345.3719. . .
19 ≈ $4345.37
𝐼 =𝐴−𝑃
= $4345.37 − $4300
= $45.37
Interest charged is $45.37

Costs = $37 + (12×$1.48) + (1×$14)

20 = $68.76
Zoe’s banking costs are $68.76

© G K Powers 2018 Published by Cambridge University Press 4