Finance A. 1. Simple Interest. Sam takes out a loan for R3 500 and agrees to pay it back at 6% p.a. simple interest over 3 years. Calculate: 1.1 1.2 1.3 2. The total amount Sam will pay back over the 3 years. The amount of interest Sam will pay. Sam’s monthly payments.
Jane wants to study at university but requires a student loan. She has two options: A: B: R8 000 at 5% p.a. simple interest over 2 years or R8 000 at 4% p.a. simple interest over 4 years.
Work out which is the better option for Jane. 3. 4. 5. Sibongile invests R12 000 at 12% p.a. simple interest over two years. Calculate the value of his investment at the end of the two years. Sarah takes out a loan for R16 000 and repays it over 3 years at 12,5% p.a. simple interest. Calculate how much interest she will pay. Mr. Shangase buys a house for R500 000 and chooses to pay it back over 25 years. His monthly repayments are R4 369,00. 5.1 5.2 B. 1. How much does Mr. Shangase pay back in total over the 25 years? Calculate the rate of simple interest per annum on the loan over the 25 years.
Hire Purchase. Peter buys a camera and equipment for R32 000. He pays a 20% deposit and pays the rest over three years at 13% p.a. simple interest. 1.1 1.2 1.3 1.4 Calculate Calculate Calculate Calculate how much was paid as the deposit. the amount of the loan. how much was repaid on the loan at the end of three years. the monthly payments.
2.
Michelle buys a washing machine and tumble dryer set at a cost of R12 000. She pays a deposit of 15% and pays the balance over three years at 14% p.a. simple interest. Calculate how much Michelle pays back in total. Paula buys a leather lounge suite for R18 000. She pays a 10% deposit and pays the balance over two years at a simple interest rate of 15% p.a. Calculate her monthly payments.
3.
4.
Mr. Murphy buys a home entertainment system for R22 000. He pays a 12% deposit and pays the rest over 4 years at 10% simple interest. 4.1 4.2 4.3 4.4 Calculate Calculate Calculate Calculate the amount of the deposit. the outstanding amount. how much is paid back on the loan over the four year period. the monthly payments.
C. 1. 2.
Compound Interest. R8 000 is invested at 7% p.a. compounded annually. Calculate the value of the investment after 6 years. Lisa invests R6 000 at 15% p.a. compounded annually. Calculate the value of her investment after: 2.1 5 years 2.2 15 years 2.3 20 years
3.
Paul decides to invest R5 000 at 8% p.a. compounded annually for 3 years. 3.1 3.2 Find the value of his investment after the three years. The interest rate then increases to 10% p.a. for the next 2 years and he decides to re-invest. Calculate how much money he will have after the 2 years.
4.
R8 200 is invested for 9 years. During the first four years, the interest rate is 7,25% p.a. compounded annually. Thereafter, it increases to 9,5% p.a. Calculate the value of the investment after 9 years. Inflation. Use the table of inflation rates below to answer the following questions: 2000 12,32 2001 14,26 2002 13,67 2003 12,8 2004 15,23 2005 14,36 2006 15,75
D. 1.
Year Rate % 1.1 1.2 1.3 1.4
If a trolley of food cost R465 at the beginning of 2003, work out what it would cost at the end of 2006. Use the compound interest rate formula to work out what the trolley of food would have cost if the average rate of inflation from 2003 to 2006 was 14,54% p.a. A CD cost R145 at the beginning of 2004. Work out what it would cost at the end of 2006 using the table. At the beginning of 2000, a couch cost R2549. Use the table to work out what the couch would cost at the end of 2002.
2. E.
A new car costs R135 000. If inflation is calculated at 8,7% p.a., calculate how much a similar car would cost in 10 years time. Exchange Rates.
Use the exchange rate table to answer the questions that follow: Rand 1 1. 2. 3. 4. 5. F. 1. 2. Australian Dollar 0,21 British Pound 0.085 Canadian Dollars 0,22 Euro 0,12 Swiss Francs 0,19 Zimbabwean Dollars 492,3
If you buy a watch for 100 British Pounds, what would it cost you in rands? A music store imports a crate of CD’s from America at a cost of 350 American Dollars. What did this cost the store in rands? A wine farmer exports wine from the Cape to France. The wine is valued at R4 275. What would the wine cost in Euros? A travel agent books a hotel for a customer in Canada at a cost of 465 Canadian Dollars. What is this costing the customer in rands? Mrs. Khumalo earns the equivalent of R2 500 South African rands whilst working in Harare. What would this be in Zimbabwean dollars? Commission Rentals. A house is sold for R520 000 and the commission is charged at 6,2%. Work out the amount of commission payable on the sale of the house. Work out the commission earned on the sale of a house valued at R1,75 million if the commission is 5 % for the first R450 000 and 4% on the balance of the sale. A flat is leased out for R3 800 per month and the agent earns a commission of 2,5%. Calculate the agent’s monthly commission on the rental. A car can be hired from a particular company for R350 a day and this includes 75 free km per day. Additional kilometers cost R2,10 per km. If Thandeka rents a car for 5 days and travels a total distance of 610 km, work out how much she pays for the rental. Simon is employed as a car salesman. He earns a basic salary of R2 750 and is paid a 2,5% commission on whatever he sells. If Simon sells 2 cars in a month at a value of R260 000, work out his salary for that month.
3. 4.
5.