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

Amortisation and annuities Problem set A Answers

Skills

  1. (a) £278.53 (N = 48, PV = 12 000, FV = 0, PpY = CpY = 12) (b) £13 369.50 (c) £1 369.50

  2. $86 152.27 (N = 300, Pmt = −450, FV = 0)

  3. €16 053.42 (N = 96, PV = 0, Pmt = −150)

  4. £13 443.14 (N = 20, PV = −200 000, FV = 0, PpY = CpY = 1)

  5. (a) $258.53 (b) $1385.49

In context

  1. N = 39.79…, so 40 payments (the last one is smaller).

  2. N = 81.3…, so 81 full withdrawals.

  3. (a) Option 1: £278.72, Option 2: £213.85 (b) Option 1: £10 033.83, Option 2: £10 264.80 (c) Option 1, by £230.96

Stretch

  1. (a) £881.93 (b) £125 078.58 (keep Pmt, set N = 120 and solve for FV)

jmaths.xyz · AI SL · 12.2.2 Amortisation and annuities