VCE General Maths Recursion and Financial Modelling 2017 Exam 2 Mini Test 2
VCAA General Maths Exam 2
This is the full VCE General Maths Exam with worked solutions. You can also try Mini-Tests, which are official VCAA exams split into short tests you can do anytime.
Number of marks: 7
Reading time: 2 minutes
Writing time: 10 minutes
Instructions
• Answer all questions in the spaces provided.
• Write your responses in English.
• In all questions where a numerical answer is required, you should only round your answer when instructed to do so.
• Unless otherwise indicated, the diagrams in this book are not drawn to scale.
Recursion and financial modelling - 2017 & 2016 - Exam 2 (Part 2)
Alex sold his mechanics' business for $360 000 and invested this amount in a perpetuity.
The perpetuity earns interest at the rate of 5.2% per annum.
Interest is calculated and paid monthly.
a. What monthly payment will Alex receive from this investment? 1 mark
b. Later, Alex converts the perpetuity to an annuity investment.
This annuity investment earns interest at the rate of 3.8% per annum, compounding monthly.
For the first four years Alex makes a further payment each month of $500 to his investment.
This monthly payment is made immediately after the interest is added.
After four years of these regular monthly payments, Alex increases the monthly payment.
This new monthly payment gives Alex a balance of $500 000 in his annuity after a further two years.
What is the value of Alex's new monthly payment?
Round your answer to the nearest cent. 2 marks
Ken has borrowed $70000 to buy a new caravan. He will be charged interest at the rate of 6.9% per annum, compounding monthly.
a. For the first year (12 months), Ken will make monthly repayments of $800.
i. Find the amount that Ken will owe on his loan after he has made 12 repayments. 1 mark
ii. What is the total interest that Ken will have paid after 12 repayments? 1 mark
b. After three years, Ken will make a lump sum payment of $L in order to reduce the balance of his loan. This lump sum payment will ensure that Ken's loan is fully repaid in a further three years. Ken's repayment amount remains at $800 per month and the interest rate remains at 6.9% per annum, compounding monthly. What is the value of Ken's lump sum payment, $L? Round your answer to the nearest dollar. 2 marks
End of Question and Answer Book
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