Binomial Expansion
FINANCIAL MATHS (PART 2 )
These are exam -style questions . QUESTION 1 a) Bob runs a small car wash business. He starts saving for new equipment , by investing at 7.5% p.a compounded quarterly. i) What effective rate would give him the same return on his investment? (3) ii) Bob deposits R10000 immediately . The interest rate for the first year is 7.5% compounded quarterly . At the end of the first year, the interest rate changes to 7.8% compounded monthly. 6 months later , the rate again changes to 7% compounded monthly and he deposits another R5000. What would the investment be worth at the end of the 3rd year (6) QUESTION 2 A school decides that they are going to invest R60000 at 12% p.a compounded monthly inorder to put up floodlights on the Hockey AstroTurf. Three years later, the interest rate drops to 1% and it was compounded quarterly . Four years after the first investment , R10000 is withdrawn to buy rugby poles. What is the total investment worth 13 years after the f...
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