Financial Math Answers

From today, how many months does Nour have to leave her money in the savings account for her to earn the $4700 she needs to buy a new machine for her cupcake shop?

Today, Nour’s savings are equal to $4100 and the savings account earns 6.50%.

1.      Perform the indicated operations and simplify if necessary. Convert your answers into (I) decimals and (II) percentages.

a. . 3 − 11+ 9

2    4    8

b.   5 × 21 + 8 ÷ 44

7   55    17    51

2.      Perform the indicated operations and convert the results into fractions.

a.   845.23 +1.37− 844.04

b.   12.45%×2.895

3.      A rice supplier transports 475 kilograms each of Maharlika, Sinandomeng, Dinorado, and Malagkit to a supermarket every day. The prices per kilogram of the rice variants are P37.50, P38.75, P41.25, and P55.75, respectively.

a.      How much does the supermarket pay the supplier every day?

b.      On a particular day, one of the transport vehicles got into a minor accident and lost some kilograms of Dinorado. The remaining Dinorado was weighed upon delivery, and the supplier was paid in accordance with how much was left. If the total amount paid was P78,375.00, how many kilograms of Dinorado were lost?

4.      A company sells two types of cell phones, C1 and C2. The total number of cell phones sold increased by 60% from 2014 to 2015. Eighty percent of the phones sold in 2015 were of type C2; with the number of units sold (C1 and C2 combined) totaling 152,000.

a.      How many phones were sold in 2015? How many were of type C1?

b.      How many phones were sold in 2014?

c.      Fifty percent of the phones sold in 2014 were of type C1, and the prices of the phones did not change from 2014 to 2015. If each C1 unit costs P10,000.00 and each C2 unit costs P5,000.00, did the company’s revenues increase or decrease? By what percent?

Stars Company received a non-interest bearing promissory note of QAR 26500 for 20 months from its customer. After 5 months, Union Bank discounted the note (before maturity) when the money was worth 3.10%.

Calculate the present value of this note.

A man borrows 850 taka from bank. The bill is renewed after every half year at an increase of 21% . After how much time amount will become 8500 taka.

A summary of the UK football club salut shown below, from it and additional information, you are to construct and income and expenditure account for the year ended December 31, 2019 and a balance sheet as at that date.

Cashbook summary

Balance January 1, 2019 $180 purchase of equipment $125

Collection at matches $1650 rent for football pitch $300

Profit on sale of refreshments $315 printing and stationery $65

Secretary expenses $144

Repairs to equipment $46

Groundsman wages $520

Miscellaneous expenses $66

Balance at 31 December 2019 $879

$2145 $2145

Further information

A. At Jan 1, 2019, equipment was valued at $500

B. Depreciate all equipments 20% for the year 2019

C. At December 31st 2019, Rent Paid In Advance was $60

D. At December 31st 2019, there was $33 owing for printing

a) consider a car owner who has an 80% chance of no accidents in a year, a 20% chance of being a single accident in a year. For simplicity, assume that there is a 50% probability that after the accident the car will need repairs costing ksh 500, a 40% probability that the repairs will cost kshs 5,000 and a 10% probability that the car will need to be replaced which will coat kshs 15,000. Combine the frequency and severity distribution to form

I) distribution of the random variable X, loss due to accident

II) what is the car owners expected loss

III) what is the potential variability of the loss incurred.

b) You want to take out a mortgage of kshs 200,000 on your house and you offered an interest rate of 6% on a 15 year mortgage. Interest is compounded monthly. What is your monthly repayment.

a) Martin is setting up a business ABC and his estimated cash flows are as follows: his initial capital was kshs 60,000. He projects a loss of kshs 10,000 then a profit of kshs 15,000 the following year and the preceding three years a constant profit of kshs20,000 respectively. His required rate of return is 15%. Calculate

I) payback period

II) NPV

III) Comment on the above methods

b) Suppose a loan of kshs 5,000,000 is to be repaid over 5-year period. If an interest rate of 8% per year is charged annually on the unpaid balance ,prepare an amortization schedule for the loan.

a)Briefly explain 3 principle of insurance

b) what are the advantages of discounting in finance

c) you have to make a payment on a load with a current balance of kshs 100,000 that matures 115days from now , interest accumulates daily on this loan at a rate of 6% per annum

I) what is the effective annual rate on this loan .

II) What error do you make in your calculations if you assume that interest is compounded continuously.

a) Repayment on rental property by the university of Nairobi is done by kshs 200,000 at time 5, kshs 190,000 at time 6, kshs 180,000 at time 15. Assuming an annual effective rate of interest of 3.5% calculate:

I) The present value of the repayment at time 4

II) The present value of the repayment at time 0

III) The accumulated value of the repayment at time 15

b) The force of interest is given by

F(t)= 0.04<1<\=1

0.05t-0.01,1<t<\=5

0.24, t>5

I) what is the accumulated value at any time (t>0) of investment of 1 at times 0,4 and 6?

II) what is the present value at time, t=0 of a payment atreay paid at a rate of p(t)=5t-1 received between t=1 t=5

a) A 8-month loan is repayable by singly payment of kshs 120,000. If the loan is issued at a rate of commercial discount of12% per annum, how much was initially lent to the borrower?

b). A company is due to receive a payment of kshs 300,000 from a customer in 3 months time. To smooth it's cash flows the company would prefer to receive the payment immediately and has agreed to transfer it's entitlement to this payment to a third party(a discount house) in return for an immediate payment. Calculate using a rate of commercial discount of 16% per annum. How much will the immediate payment by the discount house be?

c) Given a payment of kshs 2,000,000 due in 5years time, calculate the present value

I) simple interest of 3% per annum

II) simple discount of 3% per annum

III) compound interest of3% per annum