QMI1500 Assignment 3 Semester 2 2019 Answers

Elementary Quantitative Methods
QMI1500

Semester 2

Department of Decision Sciences
Assignment 3

Study material: Chapters 1, 2 and 3 in the Study Guide
Unique assignment number: 795275
Question 1 and 2 are based on the following information:

Seven years ago Mitch invested R14 950 at a simple interest rate of 9,5% per year. Four
years ago he withdrew the accumulated sum and reinvested it at a different yearly simple
interest rate. The total accumulated sum that Mitch has in his account now, is R28 431,91.

Question 1

The accumulated sum that Mitch reinvested four years ago is

[1] R19 628,34
[2] R18 500,63
[3] R19 210,75
[4] R20 631,00
Solution:

14 950 (1 + 9,5 ÷ 100 × 4) = 20 631.00
Question 2

Let the answer of Question 1 be represented by Q1. To obtain the yearly simple interest
rate, i (given as a decimal), at which Mitch reinvested his money four years ago, one has to
use the following formula:

28 431,91−𝑄1
[1] 𝑖 = 𝑄1×3

28 431,91−14 950
[2] 𝑖 =
14 950×4

28 431,91−14 950
[3] 𝑖 = 𝑄1×3

28 431,91−𝑄1
[4] 𝑖 = 𝑄1×4