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An interest rate of 17,5% per year, compounded quarterly, is equivalent to a continuous compounding rate of
[1] 17,185%.
[2] 17,500%.
[3] 17,128%.
[4] 19,125%.
[5] 17,888%
An amount borrowed at 29% interest per year, compounded continuously, has accumulated to R38 279,20 after four years. The initial amount borrowed was
[1] R13 823,05.
[2] R12 000,00.
[3] R12 005,53.
[4] R17 721,85.
[5] R7 160,73.
Thando invested R10 000 in a special savings account on 15 May at an interest rate of 15% per year, compounded every three months for seven months. Interest is calculated on 1 January, 1 April, 1 July and 1 October of every year.
If fractional compounding is used for the full term of seven months, the total amount of interest received is
[1] R892,79.
[2] R898,43.
[3] R901,73.
[4] R894,04.
[5] none of the above
Thando invested R10 000 in a special savings account on 15 May at an interest rate of 15% per year, compounded every three months for seven months. Interest is calculated on 1 January, 1 April, 1 July and 1 October of every year.
If simple interest is used for the odd periods and compound interest for the rest of the term, ,the amount of interest received by Thando after seven months is
[1] R901,35.
[2] R1 644,57.
[3] R896,95.
[4] R665,54.
[5] none of the above.
The price of a company's share dropped by 3.00% by the end of the first year, down to $42.25. During the second year the price of the share dropped by $1.69.
a. What was the price of the share at the beginning of the first year?
Round to the nearest cent
b. What was the price of the share at the end of the second year?
Round to the nearest cent
c. What was the percent change in the price of the share over the two years?
%
Mzomuhle takes out a personal loan of R439200,00 to help finance the building of his holiday house.The terms of his loan specify equal three-monthly repayments over five years, with13,2% interest per annum, compounded quarterly.The first payment is made three months after the loan was taken out. First find the size of the three-monthly payments.Then considering the amortisation schedule,find the total interest charged over the first year of repayments.
EXERCISE 2
The following three exercises do belong together. Assume that we have five assets. The first one has expected return μ1 = 20% and standard deviation of return equal to σ1 = 10%. The second has expected return μ2 = 40% and standard deviation of return equal to σ2 =20%.
Assume that the third asset has expected return μ3 = 10%. What is the range of the standard deviation σ3 of the third asset so that the three assets form an efficient set?
Select one:
a.
The standard deviation of the third asset needs to be below 10%.
b.
The range is the empty set, as it is not possible that all three assets are efficient in this case.
c.
The standard deviation of the third asset needs to be above 10%.
d.
The standard deviation of the third asset needs to be below 20%.
e.
The standard deviation of the third asset needs to be above 20%.
f.
The standard deviation of the third asset needs to be between 10% and 20%.
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Round your answer to the nearest year. Find the number of years it would take for R748 to increase by 72% if it is invested at an interest rate of 7,9% per annum, compounded semi-annually
Calculate the extra compound interest received when R18 400 invested at 13,2% per annum for 11,5 years interest rate paid annually is invested at the same rate but with interest paid monthly
