DSC1630
EXAM PACK
, lOMoARcPSD|21997160
DSC1630/SOL03/1
Dear DSC1630 student,
The solutions to the questions of the mandatory Assignment 03 are included in this document.Study them
and if you need clarification on any of the answers, please contact us at use
these solutions when you prepare for the examination.
You will also find the key operations for the SHARP and the HP calculators at the end of each answer.
These
key operations are not the only method, these are just examples. We hope it will help you to understand
the workings of your calculator. Please practise to use your calculator.
NOTE:
A financial calculator is a requirement for DSC1630. See TL101, page 10, paragraph 9.2. If you have a
normal or scientific calculator, you will experience difficulty to do some of the calculations. That is why a
financialcalculator is essential Support
. is provided for the Sharp and HP financial calculators. For
other financial calculators you need to download the manual from the internet if you do not have a manual.
Note: the final answer displayed on your calculator depends on how many decimals your
calculator’s display is set to. Set it to 6 or more decimals and only round off the final
answer to the required number of decimals as given in the options of the answers.
For bond calculations you must set the number of digits to 5.
HOW TO SET THE NUMBER OF DECIMALS DISPLAYED ON YOUR CALCULATOR:
• SHARP EL-738 and newer versions Press
: SET UP 0 0.DIG(0-9)? appears on the screen.Enter
the number of decimals you wish to display.
• HP10BII and newer versions : Press DISP and then the number of decimals you wish to
display.
You are welcome to contact us by e-mail if you need help regarding the study material. Our contact hours
are 07:00 until 16:00 - Monday to Friday.
Our contact details:
Ms Gomo Moagi Mrs Adéle Immelman Mrs Willemien van Hoepen
E-mail: E-mail: E-mail:
Tel: +27 12 433 4655 Tel: +27 12 433 4691 Tel: +27 12 433 4715
Remember that there are also e-tutors available on the Discussion Forum of myModules to help you with
the study material and problems you might encounter.
Lastly, everything of the best with Assignment 04.Please work through Chapters 6, 7 and 8 in the study guide
with their accompanying Evaluation exercises,and the Self-evaluation exercises in the Additional exercises
and solutions folder under Additional Resources before you attempt to answer the assignment questions
using the steps outlined on page 3 of this document.
Kind regards,
The DSC1630 team
2
, lOMoARcPSD|21997160
DSC1630/SOL03/1
1 Correct Answers
Note that in the Assessment 3 quiz on myModules, both the questions and the answer options were
randomised. Your Question 1 might not be Question 1 in the solutions below. Search for the question
you are looking for and then compare your answer to the question’s finalanswer, not the option number.
2 How to approach a question
Below are steps you can follow each and every time you are given a DSC1630 problem to solve.
1. Read through the question with comprehension.
2. Identify the type of problem by looking for identifying words/phrases. These will help you to decide
which formula(s) is/are applicable.
3. Write down the applicable formula(s).
4. Where applicable, draw a timeline of the situation to help you to understand the problem better. It is
a very useful visual tool.
5. Go back to the question, identify the given values and the variables associated with these given values,
and write them down. (It is important that you know by heart the definitions (and units) of each
variable. See your study material, pages 5, 27, 65, 67, 75, etc.)
6. Next substitute the given values into the formula(s).
7. Manipulate the formula(s) if necessary.
8. Use your calculator to solve the unknown.
9. Write down the answer using the correct units.
Following these steps every time gives you a systematic and logical way to approach DSC1630 problems with
confidence.
3
, lOMoARcPSD|21997160
DSC1630/SOL03/1 3 ASSIGNMENT 03 – DETAILED SOLUTION
3 Assignment 03 – Detailed Solution
Question 1
An amount of R600 is invested every month for eight years. The applicable interest rate is 14,65% per year
compounded quarterly.Calculate the accumulated amount of these monthly payments to the nearest hundred
rand.
In this problem we have equal deposits in equaltime periods plus the interest rate that is specified is com-
pounded.Thus we are working with annuities.
The time line with the eight years shown in months is:
Given are the monthly payment R or R600 each, the time under consideration (in years) t = 8, the
interest rate j m = 14,65% and the quarterly compounding periods, m = 4. The compounding is done
quarterly and the deposits are monthly. Now, very important is the fact that when working with annuities
the compounding period and payment periods must be the same If! not, you have to change
the compounding period, and thus the interest rate, to the same period as the payment periods using the
conversion formula in your guide - chapter 3 - see example 3.5.The formula is as follows
m !
jm n
jn = n 1+ −1 ,
m
where n stands for the new compounding period of the interest rate that has to be calculated, and m for
the given rate’s compounding period.In this case we first need to change the quarterly compounded interest
rate (m = 4) to a monthly compound interest rate (n = 12) using the above formula. After that you can
make use of the normal future value calculation of an annuity (S = Rs n i ) to calculate the accumulated
amount, S. Now, we first convert the 14,65% compounded quarterly to a compounded monthly rate:
" m #
jm n
jn = n 1+ −1
m
" 4 #
0,1465 12
= 12 1+ −1
4
= 0,144747 . . .
Secondly, we use the new monthly interest rate (do not round off) to calculate the future value of the annuity:
S = Rs ni
= 600s 8×12 0,14475÷12
= 107 517,439 . . .
4
EXAM PACK
, lOMoARcPSD|21997160
DSC1630/SOL03/1
Dear DSC1630 student,
The solutions to the questions of the mandatory Assignment 03 are included in this document.Study them
and if you need clarification on any of the answers, please contact us at use
these solutions when you prepare for the examination.
You will also find the key operations for the SHARP and the HP calculators at the end of each answer.
These
key operations are not the only method, these are just examples. We hope it will help you to understand
the workings of your calculator. Please practise to use your calculator.
NOTE:
A financial calculator is a requirement for DSC1630. See TL101, page 10, paragraph 9.2. If you have a
normal or scientific calculator, you will experience difficulty to do some of the calculations. That is why a
financialcalculator is essential Support
. is provided for the Sharp and HP financial calculators. For
other financial calculators you need to download the manual from the internet if you do not have a manual.
Note: the final answer displayed on your calculator depends on how many decimals your
calculator’s display is set to. Set it to 6 or more decimals and only round off the final
answer to the required number of decimals as given in the options of the answers.
For bond calculations you must set the number of digits to 5.
HOW TO SET THE NUMBER OF DECIMALS DISPLAYED ON YOUR CALCULATOR:
• SHARP EL-738 and newer versions Press
: SET UP 0 0.DIG(0-9)? appears on the screen.Enter
the number of decimals you wish to display.
• HP10BII and newer versions : Press DISP and then the number of decimals you wish to
display.
You are welcome to contact us by e-mail if you need help regarding the study material. Our contact hours
are 07:00 until 16:00 - Monday to Friday.
Our contact details:
Ms Gomo Moagi Mrs Adéle Immelman Mrs Willemien van Hoepen
E-mail: E-mail: E-mail:
Tel: +27 12 433 4655 Tel: +27 12 433 4691 Tel: +27 12 433 4715
Remember that there are also e-tutors available on the Discussion Forum of myModules to help you with
the study material and problems you might encounter.
Lastly, everything of the best with Assignment 04.Please work through Chapters 6, 7 and 8 in the study guide
with their accompanying Evaluation exercises,and the Self-evaluation exercises in the Additional exercises
and solutions folder under Additional Resources before you attempt to answer the assignment questions
using the steps outlined on page 3 of this document.
Kind regards,
The DSC1630 team
2
, lOMoARcPSD|21997160
DSC1630/SOL03/1
1 Correct Answers
Note that in the Assessment 3 quiz on myModules, both the questions and the answer options were
randomised. Your Question 1 might not be Question 1 in the solutions below. Search for the question
you are looking for and then compare your answer to the question’s finalanswer, not the option number.
2 How to approach a question
Below are steps you can follow each and every time you are given a DSC1630 problem to solve.
1. Read through the question with comprehension.
2. Identify the type of problem by looking for identifying words/phrases. These will help you to decide
which formula(s) is/are applicable.
3. Write down the applicable formula(s).
4. Where applicable, draw a timeline of the situation to help you to understand the problem better. It is
a very useful visual tool.
5. Go back to the question, identify the given values and the variables associated with these given values,
and write them down. (It is important that you know by heart the definitions (and units) of each
variable. See your study material, pages 5, 27, 65, 67, 75, etc.)
6. Next substitute the given values into the formula(s).
7. Manipulate the formula(s) if necessary.
8. Use your calculator to solve the unknown.
9. Write down the answer using the correct units.
Following these steps every time gives you a systematic and logical way to approach DSC1630 problems with
confidence.
3
, lOMoARcPSD|21997160
DSC1630/SOL03/1 3 ASSIGNMENT 03 – DETAILED SOLUTION
3 Assignment 03 – Detailed Solution
Question 1
An amount of R600 is invested every month for eight years. The applicable interest rate is 14,65% per year
compounded quarterly.Calculate the accumulated amount of these monthly payments to the nearest hundred
rand.
In this problem we have equal deposits in equaltime periods plus the interest rate that is specified is com-
pounded.Thus we are working with annuities.
The time line with the eight years shown in months is:
Given are the monthly payment R or R600 each, the time under consideration (in years) t = 8, the
interest rate j m = 14,65% and the quarterly compounding periods, m = 4. The compounding is done
quarterly and the deposits are monthly. Now, very important is the fact that when working with annuities
the compounding period and payment periods must be the same If! not, you have to change
the compounding period, and thus the interest rate, to the same period as the payment periods using the
conversion formula in your guide - chapter 3 - see example 3.5.The formula is as follows
m !
jm n
jn = n 1+ −1 ,
m
where n stands for the new compounding period of the interest rate that has to be calculated, and m for
the given rate’s compounding period.In this case we first need to change the quarterly compounded interest
rate (m = 4) to a monthly compound interest rate (n = 12) using the above formula. After that you can
make use of the normal future value calculation of an annuity (S = Rs n i ) to calculate the accumulated
amount, S. Now, we first convert the 14,65% compounded quarterly to a compounded monthly rate:
" m #
jm n
jn = n 1+ −1
m
" 4 #
0,1465 12
= 12 1+ −1
4
= 0,144747 . . .
Secondly, we use the new monthly interest rate (do not round off) to calculate the future value of the annuity:
S = Rs ni
= 600s 8×12 0,14475÷12
= 107 517,439 . . .
4
