Cambridge Senior General Mathematics AC/VCE Units 1 & 2

Chapter 4 Financial arithmetic: Assignment

Student name:

1 Brad wants to buy a coffee machine for his café. The advertised price is $3200
including GST. When he goes to the distributor, he negotiates a 15% discount.
a With this discount, how much will he have to pay for the coffee machine. Give
your answer to the nearest cent.
b How much (in dollars) does the discount save him?
c The discounted price still includes GST. How much GST is he paying?

2 Moshe has 100 shares in the company that manufactures the coffee machines. The
current market price of the shares is $3.20 and the company has just declared a
dividend of 16 cents.
a How much does Moshe receive in dividends in total?
b What is the percentage dividend for this share?
The company predicts that the next dividend they pay will be 7.5% higher.
c If their prediction is correct, how much will Moshe receive in total in dividends
for his shares?

3 The bank statement opposite shows transactions over a one-month period for a savings
account that earns simple interest at a rate of 3% per annum calculated on the minimum
monthly balance.

Date Transaction Debit Credit Balance

1 May 650.72
6 May Coles 447375 204.90 445.82
19 May Salary 795.55 1241.37
1 June 1241.37

a What is the monthly interest rate?

b How much interest is earned in this month? Give answer to the nearest cent.

4 Alan planned to invest $8500 in a term deposit. He had two investment plans from
which to choose.
Plan 1: Simple interest at 5% per annum

© Jones, Lipson, Main, Tulloch, Staggard 2016 1

Cambridge Senior General Mathematics AC/VCE Units 1 & 2
Chapter 4 Financial arithmetic: Assignment

Plan 2: Compound interest at 5% per annum, calculated on the increasing balance and
added to the account every month
a Calculate the total interest earned by Alan if he invested his money using Plan 1
for one year.
b Calculate, to the nearest cent, the total interest earned by Alan if he invested his
money using Plan 2 for one year.
c Calculate the simple interest rate that would provide the same total interest as
earned under Plan 2 for an investment of $8500 for one year. Give your answer
correct to two decimal places.
d Determine the number of years it would take for the investment to double if it is
invested under Plan 1.
e Alan discovered another investment plan. Under this plan, an investment would
double in exactly nine years. Calculate the annual simple interest rate of this
investment plan, correct to one decimal place.

5 Daniel buys a mountain bike on a time payment plan, which specifies a $150 deposit on
the $1100 bike and monthly instalments of $48 over two years.
a How much does the mountain bike cost Daniel in total?
b How much interest is Daniel to pay? Give answer to the nearest cent.
c What is the flat rate of interest per annum? Give answer to one decimal place.
d What is the effective rate of interest per annum?

6 Sasi buys a home coffee machine for $695. She pays for it with her credit card. Her
credit card gives her 45 days free credit then charges interest at the rate of 18.9% per
annum compounding daily.
Assuming that the coffee machine is the only thing Sasi is paying for with her credit
card,
a how much will she owe on the credit card after one month?
b how much will she owe on the credit card after 10 weeks? Give answer correct to
the nearest cent.

7 In 2016, a day ticket on a public transport system cost $9.80. Each year, the price of the
day ticket is adjusted for inflation.

© Jones, Lipson, Main, Tulloch, Staggard 2016 2

Cambridge Senior General Mathematics AC/VCE Units 1 & 2
Chapter 4 Financial arithmetic: Assignment

a If the rate of inflation in was 2.8% in 2017 and 3.2% in 2018, determine the cost
of a day pass in 2018. Give answer correct to the nearest cent.
b If the average inflation rate for the five years prior to 2016 was 3%, what was the
cost of a day ticket in 2011? Give answer correct to the nearest cent.

© Jones, Lipson, Main, Tulloch, Staggard 2016 3