Note: All final amounts must

be rounded off to 2 decimal

MCR3U1 places!

UNIT 8 TEST
DISCRETE FUNCTIONS: FINANCIAL APPLICATIONS

Weighting Weighted
Your Mark Out of
(%) Mark
Knowledge 14 30
Application 14 30
Communication 7 20
Thinking 5 20

Name:

R [ ( 1+i ) −1 ]
n
n
A=P+ ¿ A=P ( 1+i ) A=
i
A R [ 1−( 1+i ) ]
−n
PV = or PV = A ( 1+i )
−n
PV =
( 1+ i )n i

Knowledge
1. Determine the amount of each investment. Show all the values you substitute into
the formula.
a) $3550 at a simple interest of 7.5%/a for 25 years and 6 months.
[2]

b) $1900 at 5.5%/a compounded quarterly for 5 years.

[2]

c) $9500 at 4%/a compounded weekly for 2 years.

[2]

d) How much money should be deposited today to have $ 10 500 in 10 years if the
money will earn 4.85% compounded daily?
[2]

2. Richard saves $ 500 in an account every other week for 5 years. Calculate the
amount he will have saved at the end of the 5 years if the interest earned is 3.5%
compounded bi-weekly.
[4]

Page 1 of 4
 Note: All final amounts must
be rounded off to 2 decimal
MCR3U1 places!

Application
1. Jojo deposits $ 4000 into a savings account. Five years later the money has grown to
$4575.45. Find the interest rate, correct to the nearest hundredth of a percent,
earned if it is compounded semi-annually. Show your work.
[2+2]

2. Christine is planning on buying a new car. The selling price is $ 29 990.

a) What is the value of HST (13%)
[0.5]
b) What will be the total price with HST?
[1]

c) If she gets a loan for the full amount at 4.5% compounded monthly for 5 years, what
will be the monthly payment? Show your work.
[4.5]

d) Calculate the amount of interest she will pay for the loan over 5 years.
[2]

Page 2 of 4
 Note: All final amounts must
be rounded off to 2 decimal
MCR3U1 places!

Communication
1. Define annuity, the period of annuity and the term of the annuity.
[3]

2. For each part, show the calculation used and the answer.
a) The rate of interest for a loan is 9% per annum. What is the interest rate per
compounding period if the interest is compounded monthly?
[1]

b) How many compounding periods are there for a loan compounded quarterly
for 5 years?
[1]

3. Complete and label the timeline for the situation below. Do not solve the question.

You have $3500 to invest. The current rate of interest is 4.05 % compounded
quarterly. Calculate the amount you will have at the end of 35 years.
[2]

Page 3 of 4
 Note: All final amounts must
be rounded off to 2 decimal
MCR3U1 places!

Thinking
1. Julia wants to save $150 000, so she makes monthly payments of $250 into an account
that earns 4.2%/a compounded monthly. How long will it take her to reach her goal?

[4]

4. An account pays 6.5% compounded monthly. How much must be deposited in the
account now to provide a regular payment of $150 at the end of each month for the
next three years, starting one month from now?
[3]

Page 4 of 4