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FIM502S - FINANCIAL MATHEMATICS 1 - 2ND OPP - JAN 2023 |
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nAmlBIA unlVERSITY
OF SCIEnCE Ano TECHnOLOGY
Faculty of Health and Applied Sciences
Department of Mathematics and Statistics
QUALIFICATION:Bachelor of Science; Applied Mathematics and Statistics
QUALIFICATIONCODE:07BSAM
LEVEL:5
COURSE:FINANCIALMATHEMATICS 1
COURSECODE:FIM502S
DATE:January 2023
DURATION:3 Hours
SESSION:Theory
MARKS: 100
SUPPLIMENTARY/SECONDOPPORTUNITYEXAM QUESTION PAPER
EXAMINER(S)
Dr Victor Katoma
MODERATOR:
Prof Samuel Eegunjobi
THIS QUESTIONPAPERCONSISTSOF 2 PAGES
(Excluding this front page)
INSTRUCTIONS
1. Answer ALLthe questions.
2. Write clearly and neatly.
3. Number the answers clearly ..
PERMISSIBLEMATERIALS
1. Non-programmable pocket calculator without the cover
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QUESTION 1 (25 MARKS)
•• 1-V 11
1.1 Show that a ;;i=-d-
(5)
1.2 A loan of N$10, 000 is to be repaid over 10 years by a level annuity payable
monthly in arrears. The amount of the monthly payment is calculated on the basis of
an interest rate of 1% per month effective. Find the
1.2.1
1.2.2
1.2.3
1.2.4
Monthly repayment.
(4)
Total capital repaid and interest paid in the 1st and last year respectively. (6)
After which monthly repayment the outstanding loan is first
less than N$5, 000.
(5)
For which monthly repayment the capital repaid first exceeds the interest. (5)
QUESTION 2 (25 MARKS)
2.1 Define the nominal rates of interest
(3)
2.2 Derive the compound interest formula from simple interest
(7)
2.3 Deduce the continuous compounding formula from the compounding formula (10)
2.4 Show that a°'1 = lim a,,1= 1/i
(5)
QUESTION 3 (25 MARKS)
= 3.1 Given that o 0.1 find the values of
(12)
3.2 On 10 Jan in each of the years 1964 to 1979 inclusive, an investor deposited £5000 in
a special bank savings account. On 10 Jan 1983, the investor withdrew his savings.
Given that over the entire period the bank used an annual interest rate of 7% for its
special savings accounts, find the sum withdrawn by the investor.
(10)
3.4 Why do banks impose interest
(3)
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QUESTION 4 (25 MARKS)
= 4.1 Given that d 6%, compute the value of z-(12)
(9)
4.2
= Prove that Sn]
(l+i)n-1
i
(7)
4.3 Define the following
4.3.1 Loan schedule
(4)
4.3.2 Effective interest rates
(5)
--END OF EXAMINATION-
K0EEP
CALM
....,..1. 1:,
GOOD
LUCK
3IPage