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IB Mathematics: Applications and Interpretation HL · 12.2: Finance · 12.2.2

Amortisation and annuities Problem set B Answers

Skills

  1. (a) €340.03 (N = 48, PV = 15 000, FV = 0, PpY = CpY = 12) (b) €16 321.44 (c) €1 321.44

  2. £67 522.48 (N = 180, Pmt = −520, FV = 0)

  3. $17 490.49 (N = 72, PV = 0, Pmt = −220)

  4. €15 168.51 (N = 25, PV = −250 000, FV = 0, PpY = CpY = 1)

  5. (a) £182.84 (b) £1029.67

In context

  1. N = 42.6…, so 43 payments (the last one is smaller).

  2. N = 91.7…, so 91 full withdrawals.

  3. (a) Plan 1: €295.16, Plan 2: €203.09 (b) Plan 1: €7083.95, Plan 2: €7311.14 (c) Plan 1, by €227.19

Stretch

  1. (a) $1 441.74 (b) $165 587.36 (keep Pmt, set N = 96 and solve for FV)

jmaths.xyz · AI HL · 12.2.2 Amortisation and annuities