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FIM502S - FINANCIAL MATHEMATICS 1 - 1ST OPP - NOVEMBER 2024 |
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nAml BIA UnlVERSITY
OF SCIEnCEAnDTECHnOLOGY
FacultoyfHealthN, atural
ResourcaensdApplied
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Schoolof Naturaland Applied
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Departmenot f Mathematics,
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13JacksonKaujeuaStreet
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Windhoek
NAMIBIA
T: •264 612072913
E: msas@nust.na
W: www.nust.na
QUALIFICATION: BACHELOR of SCIENCEIN APPLIED MATHEMATICS AND STATISTICS
QUALIFICATIONCODE: 07BSAM
LEVEL:5
COURSE:FINANCIAL MATHEMATICS 1
COURSECODE: FIM502S
DATE: NOVEMBER 2024
DURATION: 3 HOURS
SESSION: 1
MARKS: 100
EXAMINER:
MODERATOR:
FIRST OPPORTUNITY: EXAMINATION QUESTION PAPER
Mrs. Hilma Yvonne Nkalle
Prof. Adetayo Samuel Eegunjobi
INSTRUCTIONS:
1. Answer all questions on the separate answer sheet.
2. Pleasewrite neatly and legibly.
3. Do not use the left side margin of the exam paper. This must be allowed for the examiner.
4. No books, notes and other additional aids are allowed.
5. Mark all answers clearly with their respective question numbers.
PERMISSIBLE MATERIALS:
1. Non-Programmable Calculator
This paper consists of 3 pages including this front page
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Question 1 [5 Marks]
An Investor wants to have N$ 25000 after 5 years. If they invest at an annual interest rate of
4%, how much should they invest now?
Question 2 [4 Marks]
If N$ 8500 is invested at an annual interest rate of 6.2% and the simple interest earned after
some time is N$ 2635, how long was the money invested?
Question 3 [S Marks]
A principal of N$ 10000 is invested at an annual interest rate of 6%, compounded quarterly,
for four years. What is the total amount after 4 years?
Question 4 [6 Marks]
How long will it take for an investment of N$ 15000 to grow to N$ 25000 at an annual
interest rate of 7%, compounded monthly?
Question 5 [6 Marks]
Derive the general formula for effective rate of interest of compound interest.
Question 6 [8 Marks]
Derive the general formula for accumulated amount (A) for compound Interest.
Question 7 [6 Marks]
You deposited N$ 2000 at the end of year into an account earning 6% annual interest. How
much will you have in the account at the end of 10 years?
Question 8 [6 Marks]
You are set to receive N$ 2500 per quarter for 10 years, and the interest rate is 4% per year,
compounded quarterly. What is the present value of this annuity?
Question 9 [6 Marks]
You want to accumulate N$ 100000 in 15 years by making annual contributions to an
account that earns 5% interest per year. What is the annual payment required to reach your
goal?
Question 10 [12 Marks]
Consider a loan of N$1000 borrowed at an effective rate of 12% payable yearly, with an
equal payment over a period of 3 years. Suppose that the loan is repaid in equal payments.
Set up an amortized schedules and do the calculations required.
Financial Mathematics 1 (FIM5025)
1srOpportunity- November 2024
2
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Question 11 [6 Marks]
A saving plan allows you to save NS 500 in the first month and increase your savings by NS
100 each subsequent month. How much will you have saved in the first 12 months?
Question 12 [5 Marks]
Suppose you are saving money, where the first month's savings is NS500. You increase your
savings by NS 100 every month. Calculate the savings in the 10th month.
Question 13 [5 Marks]
A company projects that its revenue will grow by 8% each year. If the revenue in the first
year is NS 50000, What will be the revenue in the fourth year?
Question 14 [6 Marks]
Saara borrowed NS50000 at an interest rate of 5% per year, and you will repay the loan in
10 annual instalments. Calculate the amount of each annual payment
Question 15 [5 Marks]
Douglas Invest NS 20000 at an annual interest rate of 6%, compounded continuously. How
much will the investment be worth in 10 years.
Question 16 [5 Marks]
You invest NS 10000 in an account that offers continuous compounding at an annual rate of
7%, How long will it take for your investment to grow to NS 30000?
Question 17 [4 Marks]
A bank offers a nominal annual interest rate of 6%, compounded quarterly. Calculate the
affective interest rate (EIR).
Financial Mathematics 1 (FIMS02S)
15r Opportunity- November 2024
3