SAEP Matric Success – Zisukhanyo

Maths Worksheet
Tuesday 24th March 2009

Financial Mathematics – Interest and Depreciation

1. R900 is invested for 10 years at 8,5% p.a. compound interest. Calculate the amount of
interest earned.

2. R4 000 is invested in a savings account at a bank for eight years. Calculate how much
money will be in the account in each of the following cases:
a) The effective annual interest rate is 10% p.a. compounded annually.
b) The interest rate is 10% p.a. compounded quarterly.
c) The interest rate is 10% p.a. compounded monthly.
d) The interest rate is 10% p.a. compounded daily.

3. At the birth of his daughter, Tom deposited R1 500 in his banking account. This is
since earning 12,5% compound interest, compounded annually. On her 18th birthday Tom
wants to withdraw the total amount and make it available for his daughter’s further
studies. Calculate the final amount Tom will withdraw.

4. A person has R20 000 to invest for 3 years and is faced with two options. Proposal A is
to invest the R20 000 at 6% p.a. compound interest, calculated monthly. Proposal B is to
invest the amount at 8% p.a. compounded annually. Which of the two is the better
investment?

5. Calculate, correct to 1 decimal place, the interest rate if R11 251 is invested for 7 years
at r% compound interest and the final amount is R21 236,84.

6. The value of a truck depreciates annually at 8%. If the present value is R50 000,
calculate the value of the truck 7 years ago.

7. The value of a machine is R20 000. The value depreciates at r% calculated at the end
of each year. After 16 years the value of the machine is R5 267,87. Calculate r.

8. A business sets up a sinking fund to replace a truck in eight years’ time and pays
R1 800 each month into the fund, starting in one month’s time. How much money would
have accumulated in the fund at the end of the eight years immediately after the last
payment has been made, if the interest was calculated at 9,4% p.a. compounded monthly?

9. A man intends buying a car in 5 years time at an estimated cost of R80 000. At what
interest rate, correct to 1 decimal place, must he invest R30 000, if the interest is
compounded monthly?

10. A young couple needs R30 000 for an overseas trip which they want to make in six
years time. How much, correct to the nearest rand, do they have to invest now at 18% p.a.
compound interest compounded monthly, to enable them to afford the trip?