ARITHMETIC AND INTEREST
Ex. 8ACALCULATE
Q.1 (i)
TO THE NEAREST CENT WHERE
NECESSARY THE COMPOUND INTEREST ON (I)
€600 FOR 2 YEARS AT 5%
Year 1
Year 2
P1 = €600
P2 = €630
?
R1 = 5%
R2 = 5%
= €630
A1 = (600)(1.05)
?
= €661.50
A2 = (630)(1.05)
?
I1 = 630
?
– 600 = €30
I2 =661.50
?
– 630 = €31.50
Compound Interest = 661.50 – 600 = €61.50
CALCULATE TO THE NEAREST CENT WHERE
NECESSARY THE COMPOUND INTEREST ON
(II) €1800 FOR 2 YEARS AT 9%
Year 1
Year 2
P1 = €1800
P2 = €1962
?
R1 = 9%
R2 = 9%
= €1962
A1 =(1800)(1.09)
?
= €2138.58
A2 = (1962)(1.09)
?
Compound Interest = 2138.58 - 1800 = €338.58
Ex. 8ACALCULATE
Q.1 (iii)
TO THE NEAREST CENT WHERE
NECESSARY THE COMPOUND INTEREST ON
(III) €3500 FOR 3 YEARS AT 7½%
P = €3500
R = 7½ %
A1 = ?(3500)(1.075) = €3762.50
A2 = ?
(3762.50)(1.075) = €4044.69
A3 = ?(4044.69)(1.075) = €4348.04
Compound Interest = 4348.04 - 3500 = €848.04
Ex. 8ACALCULATE
Q.1 (iv)
TO THE NEAREST CENT WHERE
NECESSARY THE COMPOUND INTEREST ON
(III) €7800 FOR 3 YEARS AT 3½%
P = €7800
R = 3½ %
A1 = ?(7800)(1.035) = €8073
A2 = ?
(8073)(1.035) = €8355.56
A3 = ?(8355.56)(1.035) = €8648.00
Compound Interest = 8648 – 7800 = €848
Ex. 8A Q.2
€4600 WAS INVESTED FOR 2 YEARS AT COMPOUND
INTEREST. IF THE RATE FOR THE FIRST YEAR WAS
6% AND FOR THE SECOND YEAR WAS 9%, FIND THE
TOTAL INTEREST FOR THE TWO YEARS.
Year 1
Year 2
P1 = €4600
P2 = €4876
?
R1 = 6%
R2 = 9%
A1 = ?(4600)(1.06) = €4876
= €5314.84
A2 = (4876)(1.09)
?
Compound Interest = 5314.84 – 4600 = €714.84
Ex.
Q.3
A 8A
COMPANY
BORROWED €12000 FROM A BANK AT 11%
PER ANNUM, COMPOUND INTEREST. THE COMPANY
REPAID €5000 AT THE END OF THE FIRST YEAR. HOW
MUCH WAS OWED TO THE BANK AT THE END OF THE
SECOND YEAR.
Year 1
Year 2
P1 = €12000
P2 = 13320
?
– 5000 = €8320
R1 = 11%
R2 = 11%
= €13320
A1 = (12000)(1.11)
?
= €9235.20
A2 = (8320)(1.11)
?
ANS: Amount owed = €9235.20
WAS INVESTED IN A BUILDING
Ex. 8A€2500
Q.4
SOCIETY. IF IT AMOUNTED TO €2612.50
AFTER ONE YEAR CALCULATE THE RATE OF
INTEREST?
P = €2500
R=?
A = €2612.50
A/P = 2612.5/2500 = 1.045
Interest rate = 4½%
Ex. 8A Q.5
A SUM OF MONEY IS INVESTED AT 7% P.A. IF IT
AMOUNTS TO €6848 AFTER ONE YEAR FIND
THE SUM INVESTED?
P=?
R = 7%
A = €6848
A = 107%
P = 100%
€6848 is 107%
6848/107 = €64 is 1%
(64)(100) = €6400 is 100%
ANS: P = €6400
INCOME TAX
Tax payable = Gross Tax – Tax credits
INCOME TAX QUESTIONS CAN
BE DONE BY FILLING IN THE
FOLLOWING TABLE
Gross Pay
Tax Band 1
Tax band 2
Gross Tax
Less Tax Credits
Tax Payable
Net Pay
Gross Pay
Tax Band 1:
Tax Band 2:
Gross Tax
Less Tax Credits
Tax Payable
Net Pay