practice: simple & compound interest/depreciation

Transcription

1 practice: simple & compound interest/depreciation [145 marks] Jackson invested Australian dollars (AUD) in a bank that offered simple interest at an annual interest rate of r %. The value of Jackson s investment doubled after 20 years. 1. Maddison invests AUD in a bank that offers compound interest at a nominal annual interest rate of 4.44 %, compounded quarterly. Calculate the number of years that it will take for Maddison s investment to triple in value n = 15000(1 + ) 400 Note: Award for substituted compound interest formula, (A1) for a correctly substituted formula and correctly equated to n 3 = (1 + ) 400 Note: Award for substituted compound interest formula, (A1) for a correctly substituted formula and correctly equated to 3. n = 25 years (A1) (C3) Notes: Award (A1)(M0)(A0) if 24.9 or seen as a final answer, with no working seen. Award, at most, (A1)(A0) if working is seen and a final answer of 24.9 or is given. Veronica wants to make an investment and accumulate EUR over a period of 18 years. She finds two investment options. 2. Option 2 offers a nominal annual interest rate of 4 %, compounded monthly. Find the amount that Veronica has to invest with option 2 to have EUR in her account after 18 years. Give your answer correct to two decimal places C = (1 + ) = Note: Award for substitution into a compound interest formula. Award (A1) for correct substitution and equation. C = (EUR) (A1) (C3) Note: The final (A1) can only be given for seeing the correct figures. Cedric wants to buy an 8000 car. The car salesman offers him a loan repayment option of a 25 % deposit followed by 12 equal monthly payments of a. Write down the amount of the deposit.

2 2000 (euros) (A1) 3b. Calculate the total cost of the loan under this repayment scheme Note: Award for addition of two correct terms (euros) (A1)(ft)(G2) Note: Follow through from their part (a). 3c. Cedric s mother decides to help him by giving him an interest free loan of 8000 to buy the car. She arranges for him to repay the loan by paying her x in the first month and y in every following month until the 8000 is repaid. The total amount that Cedric s mother receives after 12 months is This can be written using the equation x +11y = The total amount that Cedric s mother receives after 24 months is Write down a second equation involving x and y. x + 23y = 7100 (A1) 3d. Cedric s mother decides to help him by giving him an interest free loan of 8000 to buy the car. She arranges for him to repay the loan by paying her x in the first month and y in every following month until the 8000 is repaid. The total amount that Cedric s mother receives after 12 months is This can be written using the equation x +11y = The total amount that Cedric s mother receives after 24 months is Write down the value of x and the value of y. x = 200, y = 300 (A1)(ft)(A1)(ft)(G2) 3e. Cedric s mother decides to help him by giving him an interest free loan of 8000 to buy the car. She arranges for him to repay the loan by paying her x in the first month and y in every following month until the 8000 is repaid. The total amount that Cedric s mother receives after 12 months is This can be written using the equation x +11y = The total amount that Cedric s mother receives after 24 months is Calculate the number of months it will take Cedric s mother to receive the 8000.

3 200 + n 300 = 8000 Note: Award for setting up the equation. Follow through from their x and y found in part (d). n = 26 (A1)(ft) = 27 (months) (A1)(ft)(G3) Notes: Middle line n = 26 may be implied if correct answer given. The final (A1)(ft) is for adding 1 to their value of n (even if it is incorrect). Follow through from their part (d). If the final answer is not a positive integer award at most (ft)(a0). Award (G2) for final answer of Note: Award for division of difference by their value of y, (A1) for 24 seen. 27 (months) (A1)(ft)(G3) Note: Follow through from their value of y. 3f. Cedric decides to buy a cheaper car for 6000 and invests the remaining 2000 at his bank. The bank offers two investment options over three years. [5 marks] Option A: Compound interest at an annual rate of 8 %. Option B: Compound interest at a nominal annual rate of 7.5 %, compounded monthly. Express each answer in part (f) to the nearest euro. Calculate the value of his investment at the end of three years if he chooses (i) Option A; (ii) Option B. (i) (1 + ) 100 Note: Award for correct substitution in compound interest formula (euros) (A1)(G2) Note: If the answer is not given to the nearest euro award at most (A0). (ii) (1 + ) Note: Award for substitution in compound interest formula, (A1) for correct substitutions (euros) (A1)(G2) Note: If the answer is not given to the nearest euro, award at most (A0), provided this has not been penalized in part (f)(i). [5 marks]

4 Jenny invested $ in a bank account that paid 3.5 % annual simple interest. She withdrew her investment from the account when its value was $ Ramón invests $ in a bank account that pays 3.4 % nominal annual interest, compounded quarterly. Find the minimum number of years that Ramón must invest the money for his investment to be worth $ n = 18000[1 + ] Note: Award for substituted compound interest formula, (A1) for correct substitutions. (n =)12 (A1) (C3) Note: Correct answer only. If seen award (A2). Marcus has been given 500 Australian dollars (AUD) by his grandmother for his 18th birthday. He plans to deposit it in a bank which offers a nominal annual interest rate of 6.0 %, compounded quarterly, for three years. 5a. Calculate the total amount of interest Marcus would earn, in AUD, over the three years. Give your answer correct to two decimal places (1 + ) 500 Note: Award for substitution in correct formula (A1) for correct substitutions. = (A1) (C3) Note: The answer must be given to 2 dp or the final (A1) is not awarded. 5b. Marcus would earn the same amount of interest, compounded annually, for three years if he deposits the 500 AUD in a second bank. Calculate the interest rate the second bank offers. r = 500(1 + ) (ft) Note: Award for substitution in correct formula, (A1)(ft) for their correct substitutions. = 6.14 ( ) (A1)(ft) (C3) Note: Follow through from their answer to part (a).

5 Give your answers to parts (a) to (e) to the nearest dollar. On Hugh s 18th birthday his parents gave him options of how he might receive his monthly allowance for the next two years. Option A $60 each month for two years Option B $10 in the first month, $15 in the second month, $20 in the third month, increasing by $5 each month for two years Option C $15 in the first month and increasing by 10% each month for two years Option D Investing $1500 at a bank at the beginning of the first year, with an interest rate of 6% per annum, compounded monthly. Hugh does not spend any of his allowance during the two year period. 6a. If Hugh chooses Option A, calculate the total value of his allowance at the end of the two year period. The first time an answer is not given to the nearest dollar in parts (a) to (e), the final (A1) in that part is not awarded Note: Award for correct product. = 1440 (A1)(G2) 6b. If Hugh chooses Option B, calculate (i) the amount of money he will receive in the 17th month; (ii) the total value of his allowance at the end of the two year period. [5 marks] The first time an answer is not given to the nearest dollar in parts (a) to (e), the final (A1) in that part is not awarded. (i) 10 + (17 1)(5) Note: Award for substituted arithmetic sequence formula, (A1) for correct substitution. = 90 (ii) (A1)(G2) 24 (2(10) + (24 1)(5)) 2 24 ( ) 2 Note: Award for correct substitution in arithmetic series formula. = 1620 (A1)(ft)(G1) Note: Follow through from part (b)(i). [5 marks] 6c. If Hugh chooses Option C, calculate (i) the amount of money Hugh would receive in the 13th month; (ii) the total value of his allowance at the end of the two year period. [5 marks]

6 The first time an answer is not given to the nearest dollar in parts (a) to (e), the final (A1) in that part is not awarded. (i) 15(1.1) 12 Note: Award for substituted geometric sequence formula, (A1) for correct substitutions. = 47 (A1)(G2) Note: Award (A0) for Award (G1) for if workings are not shown. (ii) 15( ) Note: Award for correct substitution in geometric series formula. = 1327 (A1)(ft)(G1) Note: Follow through from part (c)(i). [5 marks] 6d. If Hugh chooses Option D, calculate the total value of his allowance at the end of the two year period.

7 The first time an answer is not given to the nearest dollar in parts (a) to (e), the final (A1) in that part is not awarded (1 + ) 100(12) 12(2) Note: Award for substituted compound interest formula, (A1) for correct substitutions. N = 2 I% = 6 PV = 1500 P/Y = 1 C/Y = 12 (A1) Note: Award (A1) for C/Y = 12 seen, for other correct entries. N = 24 I% = 6 PV = 1500 P/Y = 12 C/Y = 12 (A1) Note: Award (A1) for C/Y = 12 seen, for other correct entries. = 1691 (A1)(G2) 6e. State which of the options, A, B, C or D, Hugh should choose to give him the greatest total value of his allowance at the end of the two year period. The first time an answer is not given to the nearest dollar in parts (a) to (e), the final (A1) in that part is not awarded. Option D (A1)(ft) Note: Follow through from their parts (a), (b), (c) and (d). Award (A1)(ft) only if values for the four options are seen and only if their answer is consistent with their parts (a), (b), (c) and (d). 6f. Another bank guarantees Hugh an amount of $1750 after two years of investment if he invests $1500 at this bank. The interest is compounded annually. Calculate the interest rate per annum offered by the bank.

8 r = 1500(1 + ) 100 Note: Award for substituted compound interest formula equated to 1750, (A1) for correct substitutions into formula. N = 2 PV = 1500 FV = 1750 P/Y = 1 C/Y = 1 (A1) Note: Award (A1) for FV = 1750 seen, for other correct entries. = 8.01% ( %, ) (A1)(G2) Give all answers in this question correct to two decimal places. Arthur lives in London. On 1 st August 2008 Arthur paid euros ( EUR) for a new car from Germany. The price of the same car in London was British pounds ( GBP). The exchange rate on 1 st August 2008 was 1 EUR = GBP. 7a. Calculate, in GBP, the price that Arthur paid for the car. The first answer not given to two decimal places is not awarded the final (A1). Incorrect rounding is not penalized thereafter = (A1)(G2) 7b. Write down, in GBP, the amount of money Arthur saved by buying the car in Germany. The first answer not given to two decimal places is not awarded the final (A1). Incorrect rounding is not penalized thereafter (A1)(ft)(G1) Note: Follow through from part (a) irrespective of whether working is seen. 7c. Between 1 st August 2008 and 1 st August 2012 Arthur s car depreciated at an annual rate of 9% of its current value. Calculate the value, in GBP, of Arthur s car on 1 st August 2009.

9 The first answer not given to two decimal places is not awarded the final (A1). Incorrect rounding is not penalized thereafter (A1) Note: Award (A1) for 0.91 seen or equivalent, for their multiplied by (A1) Note: Award (A1) for seen, and for = (A1)(ft)(G2) Note: Follow through from part (a). 7d. Between 1 st August 2008 and 1 st August 2012 Arthur s car depreciated at an annual rate of 9% of its current value. Show that the value of Arthur s car on 1 st August 2012 was GBP, correct to the nearest 100 GBP.

10 The first answer not given to two decimal places is not awarded the final (A1). Incorrect rounding is not penalized thereafter (1 ) (ft) Notes: Award for substituted compound interest formula, (A1)(ft) for correct substitution. Follow through from part (a) (0.91) 4 (ft) Notes: Award for substituted geometric sequence formula, (A1)(ft) for correct substitution. Follow through from part (a). (lists (i)) , , , (ft) Notes: Award for at least the 2 nd term correct (calculated from their (a) 0.91). Award (A1)(ft) for four correct terms (rounded or unrounded). Follow through from part (a). Accept list containing the last three terms only ( may be implied). (lists(ii)) ( ) (ft) Notes: Award for subtraction of four terms from Award (A1) for four correct terms (rounded or unrounded). Follow through from part (a). = (A1) = (AG) Note: The final (A1) is not awarded unless both the unrounded and rounded answers are seen. Ludmila takes a loan of Brazilian Real (BRL) from a bank for two years at a nominal annual interest rate of 10%, compounded half yearly. 8a. Write down the number of times interest is added to the loan in the two years. 4 (A1) (C1) 8b. Calculate the exact amount of money that Ludmila must repay at the end of the two years.

11 (1 + ) Note: Award for substituted compound interest formula, (A1) for correct substitutions. N = 2 I% = 10 PV = P / Y = 1 C / Y = 2 (A1) Note: Award (A1) for C / Y = 2 seen, for correctly substituted values from the question into the finance application. N = 4 I% = 10 PV = P / Y = 2 C / Y = 2 (A1) Note: Award (A1) for C / Y = 2 seen, for correctly substituted values from the question into the finance application. amount to repay = (A1) (C3) Note: Award (C2) for final answer if not seen previously. 8c. Ludmila estimates that she will have to repay BRL at the end of the two years. Calculate the percentage error in her estimate Note: Award for correctly substituted percentage error formula. = 7.45 (% ) ( ) (A1)(ft) (C2) Notes: Follow through from their answer to part (b). Astrid invests 1200 Euros for five years at a nominal annual interest rate of 7.2 %, compounded monthly. 9. Find the interest Astrid has earned during the five years of her investment. Give your answer correct to two decimal places.

12 I = 1200(1 + ) I = Euros (A1) (C3) Notes: Award for substitution in the compound interest formula, (A1) for correct substitutions, (A1) for correct answer. If final amount found is and working shown award (A1)(A0). Kunal borrows Indian rupees (INR) from a money lender for 18 months at a nominal annual interest rate of 15%, 10. compounded monthly. Calculate the total amount that Kunal must repay at the end of the 18 months. Give your answer to the nearest rupee. [4 marks] A = (1 + ) Note: Award for substituted compound interest formula, (A1) for correct substitutions. = INR (A1) = INR (A1) (C4) Note: Award final (A1) for their answer correct to the nearest rupee. [4 marks] Give all answers in this question correct to two decimal places. Part A Estela lives in Brazil and wishes to exchange 4000 BRL (Brazil reals) for GBP (British pounds). The exchange rate is 1.00 BRL = GBP. The bank charges 3 % commission on the amount in BRL. 11a. Find, in BRL, the amount of money Estela has after commission = (3880) (G2) Note: Award for multiplication of correct numbers. 3 % of 4000 = 120 (A1) = (3880) (A1)(G2) Find, in GBP, the amount of money Estela receives. 11b.

13 = (ft)(g2) Note: Award for multiplication of correct numbers. Follow through from their answer to part (a). 11c. After her trip to the United Kingdom Estela has 400 GBP left. At the airport she changes this money back into BRL. The exchange rate is now 1.00 BRL = GBP. Find, in BRL, the amount of money that Estela should receive = (1280) (A1)(G2) Note: Award for division of correct numbers. Estela actually receives BRL after commission. 11d. Find, in BRL, the commission charged to Estela (A1)(ft) Note: Follow through (their (c) ). The commission rate is t %. Find the value of t. 11e. t = t = 4.94 (A1)(ft)(G2) Note: Follow through from their answers to parts (c) and (d). Give all answers in this question correct to two decimal places. Part B Daniel invests $1000 in an account that offers a nominal annual interest rate of 3.5 % compounded half yearly. Show that after three years Daniel will have $ in his account, correct to two decimal places. 11f.

14 A = 1000 (1 + ) = = (AG) 6 (A1) Notes: Award for substitution into correct formula, (A1) for correct substitution, (A1) for unrounded answer. If not seen award at most (A0) I = 1000(1 + ) 1000 = A = (A1) = (AG) 6 Note: Award for substitution into correct formula, (A1) for correct substitution, (A1) for unrounded answer. Write down the interest Daniel receives after three years. 11g (A1) Note: No follow through here. Give all answers in this question to the nearest whole currency unit. Ying and Ruby each have 5000 USD to invest. Ying invests his 5000 USD in a bank account that pays a nominal annual interest rate of 4.2 % compounded yearly. Ruby invests her 5000 USD in an account that offers a fixed interest of 230 USD each year. 12a. Find the amount of money that Ruby will have in the bank after 3 years = 5690 (G2) Note: Accept alternative method. Show that Ying will have 7545 USD in the bank at the end of 10 years. 12b.

15 A = 5000(1 + ) 100 = = 7545 USD (A1) (AG) or equivalent Note: Award for correct substituted compound interest formula, (A1) for correct substitutions, (A1) for unrounded answer seen. If final line not seen award at most (A0). Find the number of complete years it will take for Ying s investment to first exceed 6500 USD. 12c. n 5000(1.042) > 6500 Notes: Award for setting up correct equation/inequality, (A1) for correct values. Follow through from their formula in part (b). List of values seen with at least 2 terms Lists of values including at least the terms with n = 6 and n = 7 (A1) Note: Follow through from their formula in part (b). Sketch showing 2 graphs, one exponential, the other a horizontal line Point of intersection identified or vertical line Note: Follow through from their formula in part (b). n = 7 (A1)(ft)(G2) Find the number of complete years it will take for Ying s investment to exceed Ruby s investment. 12d.

16 n 5000(1.042) > n Note: Award for setting up correct equation/inequality, (A1) for correct values. 2 lists of values seen (at least 2 terms per list) Lists of values including at least the terms with n = 5 and n = 6 (A1) Note: One of the lists may be written under (c). Sketch showing 2 graphs of correct shape Point of intersection identified or vertical line n = 6 (A1)(ft)(G2) Note: Follow through from their formulae used in parts (a) and (b). 12e. Ruby moves from the USA to Italy. She transfers 6610 USD into an Italian bank which has an exchange rate of 1 USD = Euros. The bank charges 1.8 % commission. Calculate the amount of money Ruby will invest in the Italian bank after commission. [4 marks] = (A1) (= ) = 4771 Euros (A1)(ft)(G3) Note: Accept alternative method. [4 marks] 12f. Ruby returns to the USA for a short holiday. She converts 800 Euros at a bank in Chicago and receives USD. The bank advertises an exchange rate of 1 Euro = 1.29 USD. Calculate the percentage commission Ruby is charged by the bank. [5 marks]

17 (= 1032 USD) Note: Award for multiplying by 1.29, (A1) for Award (G2) for 1032 if product not seen. ( = 25.8) % 1032 (A1) Note: Award (A1) for 25.8 seen, for multiplying by = 2.5 % = = 97.5 (A1)(G3) Notes: If working not shown award (G3) for 2.5. Accept alternative method. [5 marks] Mr Tan invested 5000 Swiss Francs (CHF) in Bank A at an annual simple interest rate of r %, for four years. The total interest he received was 568 CHF. 13. Mr Black invested 5000 CHF in Bank B at a nominal annual interest rate of 3.6 %, compounded quarterly for four years. Calculate the total interest he received at the end of the four years. Give your answer correct to two decimal places. Financial penalty (FP) applies in part (b). I = 5000(1.009) Note: Award for substitution into the compound interest formula, (A1) for correct values. (FP) I = CHF (A1) (C3) Give all your numerical answers correct to two decimal places. On 1 January 2005, Daniel invested AUD at an annual simple interest rate in a Regular Saver account. On 1 January 2007, Daniel had AUD in the account. 14a. On 1 January 2005, Rebecca invested AUD in a Supersaver account at a nominal annual rate of 2.5% compounded annually. Calculate the amount in the Supersaver account after two years.

18 2.5 2 Amount = 30000(1 + ) 100 Note: Award for substitution into compound interest formula, (A1) for correct substitution AUD (A1)(G2) I = 30000(1 + ) Note: Award for substitution into compound interest formula, (A1) for correct substitution AUD (A1)(G2) 14b. On 1 January 2005, Rebecca invested AUD in a Supersaver account at a nominal annual rate of 2.5% compounded annually. Find the number of complete years since 1 January 2005 it would take for the amount in Rebecca s account to exceed the amount in Daniel s account. 2.5 n Rebecca's amount = 30000(1 + ) 100 Daniel's amount = n 100 (ft) Note: Award for substitution in the correct formula for the two amounts, (A1) for correct substitution. Follow through from their expressions used in part (a) and/or part (b). 2 lists of values seen (at least 2 terms per list) lists of values including at least the terms with n = 8 and n = 9 (A1)(ft) For n = 8 For n = 9 CI = CI = SI = SI = Note: Follow through from their expressions used in part (a) or/and (b). Sketch showing 2 graphs, one exponential and the other straight line point of intersection identified Note: Follow through from their expressions used in part (a) or/and (b). n = 9 (A1)(ft)(G2) Note: Answer 8.57 without working is awarded (G1). Note: Accept comparison of interests instead of the total amounts in the two accounts.

19 On 1 January 2007, Daniel reinvested 80% of the money from the Regular Saver account in an Extra Saver account at a 14c. nominal annual rate of 3% compounded quarterly. (i) Calculate the amount of money reinvested by Daniel on the 1 January (ii) Find the number of complete years it will take for the amount in Daniel s Extra Saver account to exceed AUD. [5 marks] (i) = (G2) Note: Award for correct use of percentages. (ii) n (1 + ) > (ft) Notes: Award for correct left-hand side of the inequality, for comparison to Accept equation. Follow through from their answer to part (d) (i) List of values from their 25320(1 + ) seen (at least 2 terms) Their correct values for n = 5 ( ) and n = 6 ( 30293) seen (A1)(ft) Note: Follow through from their answer to (d) (i). 4n Sketch showing 2 graphs an exponential and a horizontal line Point of intersection identified or vertical line drawn Note: Follow through from their answer to (d) (i). n = 6 (A1)(ft)(G2) Note: Award (G1) for answer 5.67 with no working. [5 marks] An amount, C, of Australian Dollars (AUD) is invested for 5 years at 2.5 % yearly simple interest. The interest earned on this investment is AUD AUD is invested at a nominal annual interest rate of 2.5 % compounded half yearly. Calculate the length of time in years for the interest on this investment to exceed AUD. [4 marks]

20 2.5 2(100) = 5000(1 + ) n Notes: Award for substitution into compound interest formula. Award (A1) for correct values. 2n = 5000(1 + ) 2(100) n = 3.44 n = 3.5 (A1) (A1) = 5000(1.0125) (A1) 2n Notes: Award (A1) for seen. Award for substitution into compound interest formula. Award (A1) for correct values. n = 3.44 years 3.5 years required (A1) (C4) Notes: For incorrect substitution into compound interest formula award at most (A0)(A1)(A0). Award (A3) for 3.44 seen without working. Allow solution by lists. In this case Award (A1) for half year rate 1.25 % seen. (A1) for seen. for at least 2 correct uses of multiplication by = and = (A1) n = 3.5 If yearly rate used then award (A0)(A1)(A0) [4 marks] Inge borrows 4500 for 2 years. Bank 1 charges compound interest at a rate of 15 % per annum, compounded quarterly. 16. Calculate the total amount to be repaid at the end of the 2 years. Give your answer correct to two decimal places.

21 Note: Financial penalty (FP) applies in this part A = 4500(1 + ) 400 Note: Award for substitution into CI formula, (A1) for correct substitution. (FP) A = ( not required) (A1) (C3) Yun Bin invests 5000 euros in an account which pays a nominal annual interest rate of 6.25%, compounded monthly. Give all answers correct to two decimal places. Find the value of the investment after 3 years. 17a FV = 5000(1 + ) Note: Award for substituted compound interest formula, (A1) for correct substitutions. N = 3 I% = 6.25 PV = 5000 P/Y = 1 C/Y = 12 Note: Award (A1) for C/Y = 12 seen, for other correct entries. N = 36 I% = 6.25 PV = 5000 P/Y = 12 C/Y = 12 Note: Award (A1) for C/Y = 12 seen, for other correct entries. = (A1) (C3) Note: The answer should be given correct to two decimal places or the final (A1) is not awarded. Find the difference in the final value of the investment if the interest was compounded quarterly at the same nominal rate. 17b.

22 FV = 5000(1 + ) 400 Note: Award for correctly substituted compound interest formula. N = 3 I% = 6.25 PV = 5000 P/Y = 1 C/Y = 4 Note: Award for all correct entries seen. N = 12 I% = 6.25 PV = 5000 P/Y = 4 C/Y = 4 Note: Award for all correct entries seen. FV = (A1) Difference = 5.80 (A1)(ft) (C3) Notes: Accept This answer should be given correct to two decimal places or the final (A1) is not awarded unless this has already been penalized in part (a). Follow through from part (a). Notes: Illustrating use of GDC notation acceptable in this case only. However on P2 an answer given with no working would receive G2. Ben inherits $6500. Ben invests his money in a bank that pays compound interest at a rate of 4.5% per annum. 18. Calculate the value of Ben s investment at the end of 6 years. Give your answer correct to 2 decimal places Ben Amount = 6500(1 + ) 100 = $ (A1) (A0) if interest only found (=$ ) (C3) 19. Eva invests USD2000 at a nominal annual interest rate of 8% compounded half-yearly. Calculate the value of her investment after 5 years, correct to the nearest dollar.

23 2000(1.04) 10 Note: for substitution into CI formula. (A1) for correct substitution (A1) Note: Award the final A1 for rounding their answer correctly to the nearest Yuan (1 + ) 2000 Note: for substitution into CI formula. (A1) for correct substitution (A1) (C3) Note: Award the final A1 for rounding their answer correctly to the nearest Yuan. Charles invests 3000 USD in a bank that offers compound interest at a rate of 3.5% per annum, compounded half-yearly. 20. Calculate the number of years that it takes for Charles s money to double n 6000 = 3000(1 + ) 200 Note: for substituting values into a compound interest formula, (A1) for correct values with a variable for the power. n = 20 years (A1) (C3) Note: If n used in formula instead of 2n, can allow as long as final answer is halved to get 20. Emma places 8000 in a bank account that pays a nominal interest rate of 5% per annum, compounded quarterly. 21a. Calculate the amount of money that Emma would have in her account after 15 years. Give your answer correct to the nearest Euro. FV = 8000(1.0125) 60 Note: for substituting in compound interest formula, (A1) for correct substitution only (A1) (C3) After a period of time she decides to withdraw the money from this bank. There is in her account. Find the number 21b. of months that Emma had left her money in the account.

24 8000( ) n = Note: for equating compound interest formula to n = 10 correct answer only (A1) So 30 months, (ft) on their n (A1)(ft) (C3) Note: Award (C2) for 2.5 seen with no working. International Baccalaureate Organization 2016 International Baccalaureate - Baccalauréat International - Bachillerato Internacional Printed for Victoria Shanghai Academy