Financial Math Answers

An oil company bores a hole 120m deep. Estimate the cost of boring if the cost is k70 for drilling the first meter with an increase in cost of k3per meter for each succeeding meter.

ii. An IPhone 12 pro who’s original Value was K32500 decreases in value by k85 per month. How long will it take before the Iphone’s value falls below k12500?

1. Project A requires an initial outlay of K2 000 but will return K4 000 at the end of 

each of years 2, 3 and 4 whereas project B requires an initial outlay of K1 400 but 

will return K3 500 at the end of years 1, 2, 3 and 4.

(i) Calculate the NPV of each project if the discount rate is 5% compounded 

annually. On the basis of this, which project would you invest in?

(ii) Estimate the IRR for each of these projects. On the basis of the IRR which 

project would you prefer?

2. A project requiring an initial outlay of K15 000 is guaranteed to produce a return of 

K20000 in three years` time. Use the

(a) net present value

(b) internal rate of return

To decide whether this is worthwhile if the capital could be invested 

elsewhere at 15 % compounded annually.

Mahmoud is in his third year of college and is a tenant in the basement apartment of a house. His rent is $568 per month plus utilities. Every month, he receives an electricity bill that averages $103. He also receives a monthly water bill for approximately $303. Additionally, every month he receives an internet bill for $44.

Every month, he earns approximately $1784 from his part-time job.

How much money does he have at the end of the each month after expenses?

Which of the following is NOT an example of a fixed expense.

Mortgage Payments

Insurance

Rent Payments

Buying Food

Assume you are going to college and you work a part-time job. You are living in an apartment with some friends.

Your total monthly income is $1950. Your monthly expenses are $1344.

You want to put 22% away into a savings account.

How much would you put away into a savings account?

Which of the following best describe Variable Expenses?

Select all that apply.

Regularly occurring.

Amount may change.

May change in frequency.

Unlikely to change over the year.

Which of the following best described fixed expenses?

Select all that apply.

Regularly occurring.

Unlikely to change over the year.

Amount may change.

May change in frequency.

Assume you are going to college and you work a part-time job. You are living in an apartment with some friends.

Your total monthly income is $1818. Your monthly expenses are $1287.

You want to put 13% away into a savings account.

How much would you put away into a savings account?

Rosita is in her second year of college and is a tenant in the basement apartment of a house. Her rent is $429 per month plus utilities. Every month, she receives an electricity bill that averages $102. She also receives a monthly water bill for approximately $260. Additionally, every month she receives an internet bill for $60.

What is the total of her average expenses per month?

Isabelle makes deposits of $365 monthly (at the end of each month) into an account that pays 1.5% interest compounded monthly.

How much money will be in the account after 5 years?