HOLY CROSS COLLEGE YEAR 12 Mathematics Standard Assessment Task 1 Assessment Notification

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1 Students Name: Class: HOLY CROSS COLLEGE YEAR Mathematics Standard 08 Assessment Task Assessment Notification Task No: Date Handed Out T.4Wk 7 Due Date T.4 Wk 9 Weighting 0% Total Marks 55 Duration: weeks NATURE OF THE TASK This assignment involves the use and application of Financial Mathematics to solve practical problems associated with buying and investment property and a car. It comprises two parts: Part A is attached to this notification. You are required to complete it independently, in your own time on the purchase of an investment property Part B is attached to this notification. You are required to complete it independently, in your own time on the purchase of a motor vehicle. Part A of the assignment will be submitted two weeks from the day it was issued. TOPICS ASSESSED Cambridge Preliminary Text Cambridge HSC Text Chapter : Budgeting and Household Expenses Chapter : Investments and Loans EQUIPMENT REQUIRED Students complete assignment on A4 paper and submit the assignment in a plastic sleeve.

2 CONTEXT FOR THE TASK This Assessment Task contributes to each student s development in skills, knowledge and understanding of the strand of Financial Mathematics as indicated by the NESA NSW Year - Syllabus. OUTCOMES BEING ASSESSED MS- MS-5 MS-6 MS-9 MS-0 represents information in symbolic, graphical and tabular form models relevant financial situations using appropriate tools makes predictions about everyday situations based on simple mathematical models uses appropriate technology to investigate, organise and interpret information in a range of contexts justifies a response to a given problem using appropriate mathematical terminology and/or calculations MS-.5 makes informed decisions about financial situations likely to be encountered post-school MS-.9 chooses and uses appropriate technology effectively and recognises appropriate times for such use MS-.0 uses mathematical argument and reasoning to evaluate conclusions, communicating a position clearly to others IN ORDER TO UNDERTAKE THIS TASK YOU WILL NEED TO: Use the text as reference and use any notes or examples of work completed in class. Use of the internet and Excel spreadsheet. ABSENCE / MISADVENTURE INSTRUCTIONS If you are absent from school on the day the task is to be submitted you are required, on your return to school, to obtain an absentee form from the Year Coordinator, complete the form and attach any documentation and submit the form to the Mathematics Coordinator. STUDENT CONFIRMATION This is all my own work. I have referenced any work used from other sources and have not plagiarized the work of others. Student Signature I have kept a copy of my task Yes/No

3 MARKING Marking criteria You will be assessed on how well you: accurately solve a variety of problems based on the scenario select and use appropriate mathematical processes, technologies and language to investigate, organise and interpret calculations provide reasoning and justification related to the solved problems. Mark:.. % Rank. Feedback: The teacher will provide feedback outlining strengths and areas for improvement to build on knowledge, understanding and skills for future learning Marker(s): Signature: Date: Assessment Task Receipt Students to record all details before handing in. Teachers sign as a receipt. Student Name: Class: Subject: Task Number: Date Due: Date Submitted: Student Signature: Teacher Signature:

4 Context Mathematics Standard Year Assessment Task Investment and Loans Application of Financial Mathematics - Money Matters MS F - Investment and Loans MS F4 Students have engaged in learning for the topic Application of Financial Mathematics. They have participated in activities to develop knowledge of the concepts of Budgeting and Household expenses and Investment and Loans and skills to solve a variety of problems. Students will require approximately four hours of independent preparation, including time during class to discuss the notification and task requirements. The task notification includes two parts: Part A will be handed out with the notification Part B and the associated marking criteria. Notes to teacher Throughout the development of Part A, teachers should monitor authorship and the progress of student work. When student feedback is provided after marking, there will be opportunity to discuss the challenges of the task with the class and consider future learning activities to assist student learning. The marking guidelines provided at the end of this document illustrate an approach for how marks may be allocated to student responses. Discuss the marking guidelines with students as part of the feedback provided upon completion of the task.

5 Buying an Investment Property Part A 0 marks Marks. You are to purchase a loan in which to buy an investment property here in Sydney. You have established a deposit of $00,000 and have been given the approval of a loan not exceeding million dollars. (including expenses) (a) Research properties you intend to purchase, one house, one duplex and one unit. Include a picture of the properties, the features, location and rental return. (b) Select one of the properties you wish to purchase and state why you selected this particular property over the other two types of properties.. (a) Choose one bank and one Financial Institution from the table below and justify as to why you made your choice Bank Financial Institution WESTPAC Mortgage Choice NAB Stratton Financial COMMONWEALTH Pepperstone ANZ La Trobe Financial (b) From your selection above now choose the lender from which you intend to use. Again you will need to justify your answer. (a) Calculate the balance owing on the property. Include in your calculations stamp duty, bank charges and solicitor fees. Stamp Duty charges $00,00 - $m $8,990 plus $4.50 for every $00 or part thereof. over $m $40,490 plus $5.50 for every $00 or part thereof Bank charges 0.% of the value of the property Solicitors fees 0.5% of the value of the property.

6 (b) Research Yellow Brick Road Home Loan calculator and determine the monthly repayment required to pay off the loan in both 0 years and 0 years. Take a snap shot of the calculation and include it in your assignment. (c) How much would you save in payments if you were to pay the loan off in 0 years as opposed to 0 years? Justify your answer. 4 Determine the out of pocket expense, or otherwise, per month that the property is either costing or returning you. You will need to take into account 7% Real Estate Agent fees, $500 p.a. Landlord Insurance, $400 p.a Water, $500 p.a. Property Insurance, $00 p.a. Maintenance and Council Rates of 0.% value of the property. For Unit properties only a Body Corporate fee of $5000 p.a. is to be included. 5 (a) It has been shown that investment in housing properties in Australia have increased in value at a compounded rate of 4.8% pa. What would be the future value of the property after 0 years (b) Determine the interest paid on the loan over 0 years (c) Express the interest as a flat rate per annum (d) Unfortunately, 5 years into the investment you are forced to sell the property. Taking into account that the rent received and the expenses remain fixed for the 5 year period determine whether you have made a profit or loss on your property. Remember all costings must be included in order to gain an accurate figure. Use Real Estate Agents fee as a flat % of the value of the property (after 5 years of purchase), the same Solicitor fee charge (0.5%). Do not take into account Capital gains tax. 4 (e) State whether your decision to purchase the investment property was a good idea or not. Justify your answer.

7 Purchasing a Motor Vehicle Part B 0 marks You are to purchase a loan in which to buy a motor vehicle. You have a deposit of $0,000 of which $5,000 is in cash and $5,000 using a credit card. You have been given the approval of a loan not exceeding $40,000 dollars. (including expenses) Obtain a picture of the car showing details about the car (price, place of purchase, age features etc) The lending institution that you are to use has granted you the loan at 8.5% p.a. fixed rate over a period of 5 years. (a) How much interest will you pay on the loan over 5 years? (b) What is the sum total of the amount borrowed on the loan? (c) What is the monthly repayment?. (a) For the Credit Card use the website: to determine the amount of each monthly payment at 8.5% interest p.a. over 5 years. Take a screen shot of your answer (b) State the amount of interest paid over the amount borrowed as a percentage. 4. Find the total amount you have to pay for the two loans. 5. You are required to set up an ongoing running-cost/loans budget. In this 5 budget you are to determine the following costs. (all costs can remain fixed over the five year period.) (petrol, registration, Green slip, comprehensive insurance, loan repayments and maintenance -$000 p.a). Use the format as illustrated below Year Item Cost p.a. Cost p/month Petrol (work on p/week x 5) then by Registration Green slip (state the company) Insurance (state company) Maintenance ($000 p.a.) 4

8 5 Total 6. You have decided to sell the car after 5 years. Unfortunately, the car has 5 depreciated each year. Complete the following table showing the depreciated value at the end of each year. Year % dep Value at the start of the Year Show working Value at the end of the Year 7. In real dollars how much has the car cost you to own over the 5 years? Justify your answer. (Include in your answer loss overall, p.a. and p/week) 8. Suppose you are on an income of $50,000 p.a. and knowing what you know now about how much it costs to run a car p.a. (a) what conclusion can you make about your purchase? Justify. (b) Offer two alternatives with valid reasoning. End of Task

9 Marking guidelines Part A Buying an Investment Property. (a) Provides picture and details (features, location and rental return) of all different properties(house, duplex, unit). Provides picture and details (features, location and rental return) of different properties. Marks Provides picture and details(features, location and rental return) of of the different properties (b) Selects one of the properties and provides a detailed explanation. Selects one of the properties and provides a brief explanation.. (a) Choses one bank and one financial institution and provides a detailed justification. Choses one from either and provides a brief justification. (b)chooses a lender and provides a detailed justification. Chooses a lender and provides a brief justification. (a) Calculates the correct balance for stamp duty, bank charges and solicitor fees. Calculates, the correct balance for two and makes progress towards the answer. Calculates the correct balance for one and makes progress towards the answer. (b) Provides a snapshot of the correct calculation. (c) Provides a correct mathematical justification.

10 Makes progress towards the correct answer. 4 Provides the correct out of pocket expenses and includes all necessary fees. Makes progress towards the correct out of pocket expenses and provides some of the necessary fees. s. 5 (a) Provides the correct future value of the property after 0 years.. (b) Provides the correct interest paid on loan over 0 years (c) Expresses interest as a flat rate per annum (d) Correctly calculates mortgage repayments (over 5 years), uses future value to find the sale value of the property, calculates all fees and charges (and capital gain tax) and correctly determines whether a profit or loss has been made. 4 Correctly calculations some of for the property after 5 years and determines whether a profit or loss has been made. Makes some progress towards the answer and provides limited explanation. (e)provides a detailed explanation on the investment property chosen. Provides a brief explanation on the investment property chosen.

11 Part B Buying a Motor Vehicle Provides picture of the car showing details (price, place of purchase, age features etc) (a) Provides correct working and answer when finding the amount of interest paid on the loan over 5 years (b) Provides correct working and answer when finding the total of the amount borrowed on the loan (c) Provides correct working and answer when finding the monthly repayment Marks (a) Provides a screen shot of the answer (b) Provides correct working and answer when finding the amount of interest paid over the amount borrowed as a percentage 4 Provides correct working and answer when finding the total amount to pay for the two loans. 5 Provides correct solutions for all 5 years Makes progress towards solutions for 4 years Makes progress towards solutions for years Makes progress towards solutions for years Makes progress towards solutions for year 5 4

12 6 Provides correct solutions for all 5 years Makes progress towards solutions for 4 years Makes progress towards solutions for years Makes progress towards solutions for years Makes progress towards solutions for year 7 Provides correct answer, explain the answer and including the terms loss overall, p.a. and p/week Provides correct answer, explain the answer without including the terms loss overall, p.a. and p/week Provides an answer, or reasonable explanation (a) Provides correct conclusion and good justification Provides correct conclusion and reasonable justification Provides correct conclusion or reasonable justification (b) Offers two alternatives with valid reasoning Offers one alternatives with valid reasoning.