How often Compound interest and effective rates is asked
6 of 6
papers asked it
avg 28 marks · last Oct 2017
Where it was asked
- May/Jun 201433.29999999999999 marks
- Oct/Nov 201333.29999999999999 marks
- May/Jun 201329.96999999999999 marks
The questions
May/Jun 2014, Q2multiple choice
Karin won R165 000 and decided to deposit 65% of this amount into an account earning 8,25% interest, compounded every four months. Determine the accumulated amount after five years, choosing from: R151 490,63; R161 110,84; R161 332,31; R247 862,83; R248 203,55.
May/Jun 2014, Q4multiple choice
Determine the effective interest rate that corresponds to a nominal rate of 17.5% compounded continuously. Select the correct answer from the options given.
May/Jun 2014, Q5multiple choice
Questions 5 and 6 refer to the following scenario: Maria Mahlangu plans to open her Sew and Go shop on 25 October 2014. On 6 February 2014 she deposited R50 000 into an account that earns 8,9% per year, compounded every two months. Interest is calculated on 1 January, 1 March, 1 May, 1 July, 1 September and 1 November of each year. Using the scenario where Maria Mahlangu deposited R50 000 on 6 February 2014 into an account earning 8,9% per year compounded every two months (with interest calculated on 1 January, 1 March, 1 May, 1 July, 1 September and 1 November of each year), suppose simple interest is applied for the odd (broken) periods and compound interest is applied for the remaining full periods. Determine which of the following amounts Maria will have available when she opens her shop on 25 October 2014: [1] R53 182,05; [2] R53 205,54; [3] R53 230,28; [4] R53 243,19; [5] none of the above.
May/Jun 2014, Q6multiple choice
Maria Mahlangu plans to open her Sew and Go shop on 25 October 2014. On 6 February 2014 she deposited R50 000 into an account earning 8,9% per year, compounded every two months. Interest is calculated on 1 January, 1 March, 1 May, 1 July, 1 September and 1 November of each year. Using fractional compounding for the entire period from 6 February 2014 to 25 October 2014, determine the amount of money Maria Mahlangu will have available when she opens her shop, choosing the correct value from: R53 124,55; R53 163,77; R53 228,37; R53 241,26; or none of the above.
May/Jun 2014, Q10multiple choice
Suppose interest is charged at 15% per annum, compounded every two months (i.e. every 2-month period). Determine the equivalent nominal annual interest rate that, if compounded weekly, would produce the same effective result.
The full Spot Map and the marks by year.