QMI1500 Assignment 03 2021 AS PER UPDATED TUTORIAL LETTER(To be used as a guideline only)

QMI1500
Elementary Quantitative Methods
Department of Decision Sciences
Assignment 03 for 2021 (compulsory)
DUE DATE: 03 August 2021




Question 1

Joshua graduated from college and began working in the family restaurant business. At the
end of the third month of the first year he began putting R7 440,00 per quarter in an
individual retirement account and contributed to it for a total of ten years. The account
earned interest at 11% per annum, compounded quarterly. The amount that was available
to him after the ten years is

[1] R1 614 466,15.
[2] R179 141,07.
[3] R22 021,46.
[4] R530 235,00.

Answer:

Annuities – You need to establish if you are dealing with the future or the present value of
an annuity. What is given: payment or present/future value? What do you have to calculate:
payment or present/future value?

In this case you need to calculate Future Value:

Using the Sharp EL-738F calculator:

, OR:

Payment = 𝑅7 440
0,11
I/YR = = 0,0275
4

N = 10 × 4 = 40
(1+𝑖)𝑛 −1
𝑆 = 𝑟[ ]
𝑖
(1+0,0275)40 −1
7 440 [ ]
0,0275
= 𝑅530 235,00