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IB Mathematics: Applications and Interpretation HL · 12.2: Finance · 12.2.1

Finance Solver: compound interest and depreciation Problem set B Answers

Skills

    1. (a) 28
    2. (b) 42
    3. (c) 18
    4. (d) 48
    1. (a) £7 886.15 (N = 7, I(%) = 2.8, PV = −6500, Pmt = 0, PpY = 1, CpY = 1)
    2. (b) $10 391.72 (N = 48, I(%) = 3.6, PV = −9000, Pmt = 0, PpY = 12, CpY = 12)

  3. €8 551.57 (N = 18, FV = 12 000; PV comes back negative)

  4. N = 10.34…, so 11 years.

  5. I(%) = 3.50

  6. N = 52.18…, so 53 months = 4 years 5 months

In context

  1. (a) $7 468.07 (I(%) = −16) (b) N = 6.30…, so 7 years.

  2. \(r = 5.4 - 2.4 = 3\); with I(%) = 3, FV = £7 994.18.

  3. Offer 1 is better by £52.27 (Offer 1: £12 606.71, Offer 2: £12 554.43)

  4. (a) €450.00 (b) 3 years

Stretch

  1. Quarterly: £26 415.77. Yearly: £26 213.96. Difference: £201.81.

jmaths.xyz · AI HL · 12.2.1 Finance Solver: compound interest and depreciation