DSC1630
Introductory Financial Mathematics
Department of Decision Sciences
Assignment 03 for Semester 01 2022
Unique assignment number: 179653
Due Date: 24 March 2022
Question 1
Mabel borrowed an amount of money from her father. The loan will be paid back by means of
payments of R25 000 each every second month for six years. An interest rate of 7,5% per year,
compounded every two months, will be applicable. The amount of the loan is
[1] R238 067,35.
[2] R721 181,68.
[3] R900 000,00.
[4] R1 127 887,64.
Answer:
In this problem we have equal payments in equal time periods plus the interest rate that is
specified is compounded. Thus, we are working with annuities. As the payments are not specified
as being paid at the beginning of the period, we assume them as being paid at the end of each
time period.
Introductory Financial Mathematics
Department of Decision Sciences
Assignment 03 for Semester 01 2022
Unique assignment number: 179653
Due Date: 24 March 2022
Question 1
Mabel borrowed an amount of money from her father. The loan will be paid back by means of
payments of R25 000 each every second month for six years. An interest rate of 7,5% per year,
compounded every two months, will be applicable. The amount of the loan is
[1] R238 067,35.
[2] R721 181,68.
[3] R900 000,00.
[4] R1 127 887,64.
Answer:
In this problem we have equal payments in equal time periods plus the interest rate that is
specified is compounded. Thus, we are working with annuities. As the payments are not specified
as being paid at the beginning of the period, we assume them as being paid at the end of each
time period.
