Financial Math Answers

An American businessman visiting London changed US$500 into English pounds when the rate of exchange was $1.75 to the pound. He spent £257 and changed the rest back into dollars when the rate of exchange was $1.55 to the pound. At each transaction the bank charged a commission of 2%. How many dollars did the man have at the end of these transactions?

4. Which has the higher annual yield, 6% compounded quarterly or 6.25% compounded semiannually?

2. To help pay your college expenses, you borrow P7000 and agree to repay the loan at the end of 5

years at 8% interest, compounded quarterly.

(a) What is the maturity value of the loan?

(b) How much interest are you paying on the loan?

SIMPLE INTEREST

Match each variable with a value by placing the correct letter on each line.

 Variable    Value

a) principal ____ 280 days

b) interest ____ 1.95%

c) interest rate ____ $2000

d) term ____ $29.92

e) Using the values above, calculate whether the interest earned is the correct amount.

f) What is the total value of this investment?

2) Calculate the amount of simple interest earned in each of the situations.

a) principal = $1500 interest rate = 2.5% term = 5 years

b) principal = $3245 interest rate = 7.5% term = 3 years

c) principal = $500 interest rate = 11% term = 9 years

3) Peter invested $1860 for 10 months at a rate of 3.8%. How much interest did he earn?

5) Mike invested $4040 for 3 years and earned $410. What interest rate was this invested at?

6) How many months does it take to earn $180 in interest on an investment of the principal is $5000 and the interest rate is 2%?

Lemuel bought bottles of food supplements at Php 1 800 each. He is planning to sell this at 15% markup on cost. At this selling price and a fixed cost of Php 40 000, how many bottles of food supplement must he sell to be able to breakeven? If he wants to earn a minimum of Php 100 000 by just selling these bottles, how many bottles must he sell?

Suppose you invest R10 000 at a simple interest rate of 12% per year. What would be the value of the accumulated amount after 6 years

David borrowed R911012 to refurbish his holiday home.the loans require monthly repayments over 12 years. When he borrowed the money the interest rate was 12,4% per annum compounded monthly , but five years later the bank increased the annual interest rate to 13.9% in line with market rates. After 5 years the present value of the loan is R682 081,77 with new interest rate his monthly payments will increase by?

Can we improve the standard of living of Namibians through an increase in productivity or through an increase in production?

Marves wants to have a total of N$4500 in two years so he can take a trip to Harare. He finds an 

account that pays 4% interest compounded monthly.

How much should Marves put into this account so that he’ll have N$4500 at the end of two 

years?

Number of Inquiries (X) = 22 , 23 , 24 , 25 , 26 , 27 Probability P(X) = 0.08, 0.19, 0.36, 0.25, 0.07, 0.05 What is the mean? *