INTRODUCTORY MATHEMATICS MOCK.docVIP

QUESTION 1 1. Solve the equation: 5x2 + 14x - 3 = 0 [2 marks] 2. Sketch the graph of the function: y = -2. (You do not need to use graph paper.) [2 marks] QUESTION 2 1. EITHER a) Determine the monthly repayments needed to repay a $50000 loan that is paid back over 25 years when the interest rate is 9% compounded annually. OR b) Find the resent value of an annuity that yields an income of 2000 at the end of each month for 10 years, assuming that the interest rate is 6% compounded monthly [5 marks] 2. An individual saves $500 in a bank account at the beginning of each year. The bank offers a return of 10% compounded annually. Determine the amount saved after 10 years. After how many years does the amount saved first exceed $20000? [6 marks] 3. EITHER a) The table below shows the prices of a good for each year between 1999 and 2004. Year 1999 2000 2001 2002 2003 2004 Price($) 40 48 44 56 60 71 Work out the index numbers, correct to 1 decimal place, taking 2000 as the base year. If the index number for 2005 is 135, calculate the corresponding price. You may assume that the base year is still 2000. OR b) Below table shows the average annual salary (in thousands of dollars) of employees in a small firm, together with the annual rate of inflation for that year. Adjust these salaries to constant 1991 prices. Comment on the rise in earnings during this period. Year 1990 1991 1992 1993 1994 Salary 17.3 18.1 19.8 23.5 26.0 Inflation 4.9 4.3 4.0 3.5 [6 marks] 4. An investment project requires an initial outlay of $8000 and will produce a return of $17000 at the end of 5 years. Use the net present value internal rate of interest methods to decide whether this is worthwhile if the market rate is 15% compounded annually [6 marks]