Arithmetic of Finance:
- Simple Interest
- Compound Interest
- Annuities, Depreciation and Amortization
- A television set costing #25000 depreciates by 15% in the first year and by 25% in the second year. Find its value after 2 years.
- How long will it take for prices to double if the rate of inflation is 25% per annum?
- Using logarithm tables, find the compound interest on #20000 for 4 years at 12% per annum.
- Calculate the amount of an annuity of #20000 payable yearly for 5 years at 12% per annum.
Reading Assignment: NGM for SS 3 Chapter 5 page 35 – 42
- Calculate the amount if simple interest is paid yearly at 15% per annum for 4 years on a principal of #550000
- Calculate the compound interest on #18000 for 10 years at 9.5% per annum.
- Find the amount created by an annuity of #60000 payable yearly for 4 years at 4% interest.
- A woman insures her life for #3million by paying a premium of #2000 at the beginning of each year for 20 years. After 20 years the insurance company ends the agreement and gives her a lump sum payment of #50000. Assume compound interest at 8% per annum.
- Calculate the actual value of the premiums paid.
- Find the profit made by the company.
- Which piece of numerical information is not needed in this problem?
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