Section 1: Business related Mathematics

Q1. A plumber quoted $300, excluding GST (Goods and Services Tax), to complete a job. A GST of 10% is added to the price. The full price for the job will be

A. $3

B. $30

C. $303

D. $310

E. $330

Q2. Pia invests $800 000 in an ordinary perpetuity to provide an ongoing fortnightly pension for her retirement. The interest rate for this investment is 5.8% per annum. Assuming there are 26 fortnights per year, the amount she will receive at the end of each fortnight is closest to

A. $464

B. $892

C. $1422

D. $1785

E. $3867

Q3. A computer originally purchased for $6000 is depreciated each year using the reducing balance method. If the computer is valued at $2000 after four years, then the annual rate of depreciation is closest to

A. 17%

B. 24%

C. 25%

D. 28%

E. 33%

Q4. Sandra has purchased a $4200 plasma television under a hire-purchase agreement. She paid $600 deposit and will pay the balance in equal monthly instalments over one year. A flat interest rate of 6% per annum is charged. The amount of each monthly instalment is

A. $300

B. $303

C. $318

D. $350

E. $371

Q5. Sandra has purchased a $4200 plasma television under a hire-purchase agreement. She paid $600 deposit and will pay the balance in equal monthly instalments over one year. A flat interest rate of 6% per annum is charged. The annual effective interest rate that Sandra pays under this agreement is closest to

A. 10%

B. 11%

C. 12%

D. 13%

E. 14%

Q6. Sam and Charlie each invest $5000 for three years. Sam’s investment earns simple interest at the rate of 7.5% per annum. Charlie’s investment earns interest at the rate of 7.5% per annum compounding annually. At the conclusion of three years, correct to the nearest cent, Sam will have

A. $86.48 less than Charlie.

B. $86.48 more than Charlie.

C. $132.23 less than Charlie.

D. $132.23 more than Charlie.

E. the same as Charlie.

Q7. Ernie took out a reducing balance loan to buy a new family home. He correctly graphed the amount paid off the principal of his loan each year for the first five years. The shape of this graph (for the first five years of the loan) is best represented by

Q8. A loan of $300 000 is taken out to finance a new business venture. The loan is to be repaid fully over twenty years with quarterly payments of $6727.80. Interest is calculated quarterly on the reducing balance. The annual interest rate for this loan is closest to

A. 4.1%

B. 6.5%

C. 7.3%

D. 19.5%

E. 26.7%

Q9. An amount of $8000 is invested for a period of 4 years. The interest rate for this investment is 7.2% per annum compounding quarterly. The interest earned by the investment in the fourth year (in dollars) is given by

A.

B.

C.

D.

E.

Q10. A pensioner receives annual payments starting at £100 and increasing at 3% p.a. payable at the end of each year for 50 years. The present value of these payments at an interest rate of 5% p.a. is approximately

A. £1,010

B. £2,020

C. £3,030

D. £4,040

E. £5,050