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Grade 11 · Financial Maths
Finance: Growth & Decay (Grade 11)
MEMORANDUM
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Mark
/ 16
Answer all questions. Show all your working — marks are awarded for method as well as the final answer. Teacher copy: accept any correct equivalent method.
- 1R15 000 is invested at 8% p.a. compounded annually. Calculate the value after 5 years.(2)15 000(1,08)⁵ = R22039,92✓✓ (2)
- 2R15 000 is invested at 8% p.a. compounded monthly. Calculate the value after 5 years.(2)15 000(1 + 0,0812)⁶⁰ = R22347,69✓✓ (2)
- 3A car worth R240 000 depreciates at 15% p.a. on a straight line. Calculate its value after 4 years.(2)240 000(1 − 0,6) = R96 000✓✓ (2)
- 4A car worth R240 000 depreciates at 15% p.a. on a reducing balance. Calculate its value after 4 years.(2)240 000(0,85)⁴ = R125281,50✓✓ (2)
- 5Convert 8% p.a. compounded monthly to an effective annual rate.(2)(1 + 0,0812)¹² − 1 = 8,30%✓✓ (2)
- 6A loaf of bread costs R18. If inflation is 6% p.a., what will it cost in 8 years?(2)18(1,06)⁸ = R28,69✓✓ (2)
- 7R50 000 grows to R80 000 at 9% p.a. compounded annually. Calculate n.(2)1,09n = 1,6 → n = 5,45 years✓✓ (2)
- 8State the difference between a nominal and an effective interest rate.(2)The nominal rate is the advertised annual rate before compounding; the effective rate is the true annual rate once compounding within the year is included.✓✓ (2)
TOTAL: 16 marks