Financial Math Answers

Lesiba invests an amount of money in an a ount earning 13,88% interest per year, ompounded weekly. After ve years, this amount has a umulated to R50 000. The amount that was invested initially is

[1] R26 105,54.

[2] R15 300,00.

[3] R29 515,94.

[4] R25 001,79.

[5] R34 700,00.

The a umulated amount that you will re eive after 52 months if you deposit R7 300 into an a ount whi h earns 9,7% interest per year, ompounded every se ond month, is

[1] R7 825,36.

[2] R10 368,43.

[3] R11 076,73.

[4] R8 388,53.

[5] none of the above.

A sum of R1 000 is due in ve months' time from now, at a simple interest rate of 12% per annum. The present value of the sum is

[1] R952,38.

[2] R567,43.

[3] R1 050,00.

[4] R625,00.

[5] none of the above

If a simple interest rate of 24% per year, is equivalent to a simple dis ount rate of 20,5% per year, then the time under onsideration is approximately

[1] 854 days.

[2]711 days.

[3] 312 days.

[4] 260 days.

[5] 304 days

Phathu needs R10 500 in ten months' time to buy herself a new lens for her amera. Two months ago she deposited R9 000 in a savings a ount at a simple interest rate of 11,5% per year. How mu h money will Phathu still need to buy the lens ten months from now?

[1] R465,00

[2] R229,50

[3] R637,50

[4] R408,67

[5] None of the above

What is meant by actuarially fair prices? What conditions will make Arrow-Debreu prices actuarially fair?

b) Using a model of incomplete market of your choice explain the consumption correlation puzzle.

A company paid dividend $12. Company is expected to grow the dividend at 10% per year for next 3 years and then at 6% per year forever. What is the price of stock at the end of third year if your discount rate is 14%? 

Siphesihle borrows money from the bank at a dis ount rate of 16,5% per year. He must pay the bank R30 000 in eight months from now. The amount of money he re eives from the bank now is

[1]R33 707,87

. [2} R26 700,00.

[3} R27 027,03.

[4} R33 463,26.

[5} R33 300,00. 

 customer borrows 4000 under a consumer credit load,repayments are calculated to give an APR of 15.4%.Instalments are paid monthly in arrears for 5 years.Calculate the flat rate of intrest

Find the present value of a series of investment of  $1  at the beginning of each year for 15 years with effective interest rate of 13.5% p.a.