DSC1630
Introductory Financial Mathematics
Department of Decision Sciences
Assignment 01 for Semester 01 2022
Unique assignment number: 189377
Due Date: 1 March 2022
Question 1
Patric borrows money from Zanele at a simple discount rate of 9,75% per annum. He must
pay him R35 000 in 27 months’ time. The amount of money that he receives from Zanele
now is
[1] R27 321,88.
[2] R44 835,87.
[3] R28 389,51.
[4] R42 678,13.
Answer:
𝑃 is the principal or total amount borrowed (in rand) which is subject to interest (𝑃 is also
known as the present value [𝑃𝑉] of the loan)
𝑟 is the rate of interest, that is, the fraction of the principal that must be paid each period
(say, a year) for the use of the principal (also called the period interest rate)
𝑡 is the time in years, for which the principal is borrowed.
Introductory Financial Mathematics
Department of Decision Sciences
Assignment 01 for Semester 01 2022
Unique assignment number: 189377
Due Date: 1 March 2022
Question 1
Patric borrows money from Zanele at a simple discount rate of 9,75% per annum. He must
pay him R35 000 in 27 months’ time. The amount of money that he receives from Zanele
now is
[1] R27 321,88.
[2] R44 835,87.
[3] R28 389,51.
[4] R42 678,13.
Answer:
𝑃 is the principal or total amount borrowed (in rand) which is subject to interest (𝑃 is also
known as the present value [𝑃𝑉] of the loan)
𝑟 is the rate of interest, that is, the fraction of the principal that must be paid each period
(say, a year) for the use of the principal (also called the period interest rate)
𝑡 is the time in years, for which the principal is borrowed.
