This paper consists of 23 pages, including a list of formulas, a table with the number of each day of the

year, ten sheets of paper for rough work and instructions for completing a mark-reading sheet.

Please complete the attendance register on the back page,

tear it off and hand it to the invigilator.

Answer all questions on the mark-reading sheet supplied. Follow the instructions for completing the
mark-reading sheet carefully. Also pay attention to the following:

• Only ONE option, indicated as [1] [2] [3] [4] [5] per question is correct. Do not mark more than
one option per question on the mark-reading sheet.

• Marks will not be deducted for incorrect answers.

• There are 30 questions for a total of 100 marks.

You are strongly advised to write your name on the mark-reading

sheet. Then, if you have entered your student number incorrectly,
we will still be able to link you to the mark-reading sheet.

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Question 1
On 21 January 2019, Banang invested an amount in an account earning 6,5% simple interest. If she has
R1 200 available on 9 May 2019, then the amount that she invested on 21 January was

[1] R1 006,00.
[2] R1 176,00.
[3] R1 177,36.
[4] R1 177,43.
[5] R1 223,08.

Question 2
The accumulated amount that Zondo will receive after 38 months if she deposits R13 300 into an account
where money is worth 11,35% per year compounded every two months is

[1] R14 117,08.

[2] R15 690,19.
[3] R18 080,24.
[4] R18 865,83.
[5] R18 988,31.

Question 3
Robert invested R1 500,00 in an account that paid 10,5% simple interest per year and, later on, received
the accumulated amount of R1 893,75. The number of months that Robert had his money invested,
rounded to one decimal place, is

[1] 2,5.
[2] 12,0.
[3] 21,0.
[4] 30,0.
[5] none of the above

Question 4
The amount of money you will receive from the bank now, if the bank has approved a loan with a
redemption value of R30 000, due eight months from now, with an applicable simple discount rate of
16,5% per year, is

[1] R26 700,00.

[2] R27 027,03.
[3] R33 300,00.
[4] R33 463,26.
[5] R33 707,87.

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ROUGH WORK

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Question 5
A tuition fee of R5 000 will be due in six months’ time. The amount that a student should deposit now
at 15% compounded weekly, to have enough to pay his tuition fee, is

[1] R4 992,80.
[2] R4 639,22.
[3] R2 161,64.
[4] R2 035,48.
[5] none of the above

Question 6
Marcia borrowed R6 000 at 10% per year, compounded semi-annually. The effective interest rate is

[1] 10,25%.
[2] 10,43%.
[3] 10,47%.
[4] 20,00%.
[5] 21,00%.

Question 7
If R35 000 accumulates to R48 320 at a continuous compounded rate of 8,6%, then the term under
consideration, rounded to two decimal places, is

[1] 2,77 years.

[2] 3,75 years.
[3] 3,91 years.
[4] 4,43 years.
[5] 6,23 years.

Question 8
The equivalent nominal rate, compounded monthly, for a 17,69% continuous compounding rate, rounded
to two decimal places, is

[1] 11,58%.
[2] 17,56%.
[3] 17,69%.
[4] 17,82%.
[5] 19,19%.

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ROUGH WORK

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Question 9
You installed a security camera at your business. The debt of R6 000 is debited against your credit
card budget account, which charges interest at 28% per year, compounded monthly. If you choose to
amortise the debt over 24 months, the monthly payment, rounded to the nearest rand, is

[1] R189.
[2] R259.
[3] R322.
[4] R329.
[5] none of the above

Question 10
Tony decides to invest in a retirement annuity with yearly payments of R1 750 and an applicable interest
rate of 15% per year, for a period of 20 years. If he decides after his first payment to annually increase
his payment by R750, then the total amount available to him when he retires in 20 years, is

[1] R49 250,00.

[2] R100 000,00.
[3] R177 500,00.
[4] R591 494,18.
[5] R691 494,18.

Question 11
After nine years, the accumulated amount of deposits of R6 000 made every second month, at an
interest rate of 8,6% per year, compounded monthly, rounded to the nearest hundred rand, is ap-
proximately

[1] R394 200,00.

[2] R484 100,00.
[3] R484 900,00.
[4] R973 200,00.
[5] none of the above.

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ROUGH WORK

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Questions 12 and 13 relate to the following situation:

The following table is an extract from the amortisation schedule for Fred’s home loan over a period:

Outstanding Interest
principal at due at Principal
beginning of end of Principal at month
Month the month the month Payment repaid end
196 R948 004,00 R8 690,04 A R17 114,67 R930 889,33

Question 12
The applicable annualised interest rate, rounded to two decimals, is

[1] 9,26%.
[2] 11,00%.
[3] 11,20%.
[4] 15,08%.
[5] none of the above.

Question 13
The size of his monthly payment is

[1] R3 878,71.
[2] R3 950,00.
[3] R8 424,63.
[4] R25 804,71.
[5] none of the above.

Question 14
Dawn will discharge a debt of R200 000 six years from now, using the sinking fund method. The interest
on the debt is 15,6% per year, paid quarterly. The sinking fund will earn interest at a rate of 8,4% per
year, compounded monthly. If the monthly deposit into the sinking fund is R2 145,84, the total yearly
cost to discharge the debt (to the nearest rand) will be

[1] R25 750.

[2] R51 533.
[3] R56 950.
[4] R109 133.
[5] R114 334.

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ROUGH WORK

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Questions 15 and 16 are based on the following situation:

Nonsa bought a spaza shop for R120 000. Her estimated cash inflows for the next five years are R15 000,
R28 000, R42 000, R35 000 and R40 000.

Question 15
The IRR (internal rate of return), approximated to two decimal places, is

[1] 6,66%.
[2] 9,16%.
[3] 10,01%.
[4] 11,93%.
[5] none of the above.

Question 16
If the profitability index of an investment is 1,0514 and the NPV (net present value) equals R25 700,
then the original investment approximately is

[1] R12 528.

[2] R13 172.
[3] R24 444.
[4] R25 700.
[5] R500 000.

Question 17
Jabulani wants to buy a new car on a promotion on 15 July 2019. On 4 March 2019 he deposited
R450 000 into an account earning 7,65% interest per year, compounded monthly. Interest is credited on
the first day of each month. If fractional compounding is used for the full term, then the amount that
Jabulani will have available on 15 July 2019 is

[1] R462 800,28.

[2] R465 458,88.
[3] R451 268,38.
[4] R451 045,18.
[5] none of the above.

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ROUGH WORK

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Question 18
You must choose between two investments, A and B. The profitability index (PI), net present value
(NPV) and internal rate of return (IRR) of the two investments are as follows:

Criteria Investment A Investment B

NPV −12 000 40 000
PI 0,985 1,053
IRR 20,00% 24,00%

Which investment/s should you choose, taking all the above criteria into consideration, if the cost of
capital is equal to 21% per year?

[1] A
[2] B
[3] Both A and B
[4] Neither A nor B
[5] There is too little information to make a decision

Question 19
The following table represents the cash flows (in rand) of the Sit Comfortable Shop.

Year Cash flows

3 40 000
5 −70 000
7 −80 000
9 10 000
11 100 000

Money can be borrowed at 14,25% per year, compounded annually, and investments can earn 8,27% per
year, compounded annually. If the future value of the cash inflows is R187 253,00, then the MIRR is

[1] 8,85%.
[2] 9,73%.
[3] 13,62%.
[4] 22,66%.
[5] none of the above.

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ROUGH WORK

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Questions 20 and 21 relate to the following situation:

Consider BOND ABC
Coupon rate: 9,4% per year
Yield to maturity: 10,6% per year
Settlement date: 16 July 2019
Maturity date: 9 October 2045

Question 20
The value of n, the number of half years from the next coupon date until maturity, is

[1] 2.
[2] 26.
[3] 44.
[4] 52.
[5] none of the above.

Question 21
The accrued interest for Bond ABC is

[1] 2,52384%.
[2] −2,18904%.
[3] 10,28849%.
[4] 11,86203%.
[5] none of the above.

Question 22
The equation for the present value of Bond XXX on 11 November 2019 is given by

0,0875 −44
 
10,4
P (11/11/2019) = a + 100 1 +
2 44 0,0875÷2 2

The fraction of the half year to be discounted back is f = 5/184. The accrued interest is −R0,1427. The
clean price for Bond XXX on the settlement date, is

[1] R115,85656%.
[2] R115,99903%.
[3] R121,05052%.
[4] R121,19145%.
[5] R121,19299%.

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ROUGH WORK

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Questions 23 to 25 are based on the following situation:

The data relate to a particular test given to nine first-year students:
Study time for test (hours)(x) 48 28 16 40 20 60 8 44 48
Mark for test (%) (y) 75 55 45 60 55 80 40 70 70

Question 23
The average time students spent studying for the test was approximately

[1] 14 hours.
[2] 17 hours.
[3] 35 hours.
[4] 61 hours.
[5] none of the above.

Question 24
The correlation coefficient between the test mark (y) and study time(x) (correct to four decimal places)
is

[1] 1,2448.
[2] 0,9869.
[3] 0,9740.
[4] 0,9485.
[5] 0,7621.

Question 25
What will Steven’s mark approximately be, using the linear regression line fitted to the data, if Steven
has studied 65 hours for the test?

[1] 35%
[2] 39%
[3] 80%
[4] 84%
[5] 100%

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ROUGH WORK

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Question 26
A typical one-pack-a-day smoker spends about R1 120 per month on cigarettes. Suppose the smoker
invests that amount at the beginning of each month in a savings account earning 4,8% interest per
year, compounded monthly. The amount of money in the account after 20 years is

[1] R23 365,07.

[2] R36 260,65.
[3] R38 001,16.
[4] R449 876,04.
[5] R451 675,54.

Question 27
Three years ago Dillen borrowed R10 000 from Soa. Interest is calculated at a simple interest rate of
14,75% per year. Six months ago he also borrowed R17 500 from her at a simple interest rate of 10,5%
per year. The total amount that Dillen will owe Soa three years from now is

[1] R27 500,00.

[2] R36 518,75.
[3] R42 781,25.
[4] R47 650,78.
[5] R49 078,73.

Question 28
Gwen deposited R100 000 into an account earning interest of 9,71% per year, compounded quarterly.
After four years she decided to deposit an additional R12 000 into this account every three months. If
the interest rate is 9,71% per year, compounded quarterly, the total balance in the account after seven
years is

[1] R264 869,85.

[2] R311 649,27.
[3] R360 602,85.
[4] R451 854,23.
[5] R477 588,50.

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ROUGH WORK

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Questions 29 and 30 relate to the following situation: Greta won R1 250 000 in the Dream Big lotto
draw today, to be paid out as she chooses.

Question 29
Assume that money is worth 7,91% per year, compounded quarterly. If Greta chooses to be paid a fixed
amount from her winnings quarterly, for an indefinite period of time, the quarterly amount that she
will receive from Dream Big will be

[1] R24,718,75.
[2] R32,958,33.
[3] R98,875,00.
[4] R312,500,00.
[5] R416,666,67.

Question 30
However, instead of the quarterly payments, Greta decides to receive her winnings rather in two pay-
ments: one payment four years from now and one payment, three times the size of the first payment, ten
years from now. If money is worth 12,6% per year, compounded half-yearly, the approximate amount
that Greta will receive four years from now is

[1] R312 500,00.

[2] R399 009,36.
[3] R509 467,09.
[4] R834 783,87.
[5] R2 037 868,37.

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ROUGH WORK

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The number of each day of the year

For leap years, add one to the number of every day after February 28.
Day Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Day
1 1 32 60 91 121 152 182 213 244 274 305 335 1
2 2 33 61 92 122 153 183 214 245 275 306 336 2
3 3 34 62 93 123 154 184 215 246 276 307 337 3
4 4 35 63 94 124 155 185 216 247 277 308 338 4
5 5 36 64 95 125 156 186 217 248 278 309 339 5
6 6 37 65 96 126 157 187 218 249 279 310 340 6
7 7 38 66 97 127 158 188 219 250 280 311 341 7
8 8 39 67 98 128 159 189 220 251 281 312 342 8
9 9 40 68 99 129 160 190 221 252 282 313 343 9
10 10 41 69 100 130 161 191 222 253 283 314 344 10
11 11 42 70 101 131 162 192 223 254 284 315 345 11
12 12 43 71 102 132 163 193 224 255 285 316 346 12
13 13 44 72 103 133 164 194 225 256 286 317 347 13
14 14 45 73 104 134 165 195 226 257 287 318 348 14
15 15 46 74 105 135 166 196 227 258 288 319 349 15
16 16 47 75 106 136 167 197 228 259 289 320 350 16
17 17 48 76 107 137 168 198 229 260 290 321 351 17
18 18 49 77 108 138 169 199 230 261 291 322 352 18
19 19 50 78 109 139 170 200 231 262 292 323 353 19
20 20 51 79 110 140 171 201 232 263 293 324 354 20
21 21 52 80 111 141 172 202 233 264 294 325 355 21
22 22 53 81 112 142 173 203 234 265 295 326 356 22
23 23 54 82 113 143 174 204 235 266 296 327 357 23
24 24 55 83 114 144 175 205 236 267 297 328 358 24
25 25 56 84 115 145 176 206 237 268 298 329 359 25
26 26 57 85 116 146 177 207 238 269 299 330 360 26
27 27 58 86 117 147 178 208 239 270 300 331 361 27
28 28 59 87 118 148 179 209 240 271 301 332 362 28
29 29 88 119 149 180 210 241 272 302 333 363 29
30 30 89 120 150 181 211 242 273 303 334 364 30
31 31 90 151 212 243 304 365 31

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FORMULAS
d
I = P rt r=
1 − dt

S = P (1 + rt) S = (1 + i)Rs n i

P = S(1 − dt) P = (1 + i)Ra n i

 tm
jm
S =P 1+ P = da n z + 100(1 + z)−n
m
 m 
jm H−R
Jef f = 100 1+ −1 ×c
m 365
−R
S = P ect ×c
365
  n1
C
j∞ = 100(ec − 1) MIRR = −1
P Vout
 
jm N P V +original investment
c = m ln 1 + PI =
m original investment
c
R


jm = m e m − 1 P = i

  mn !
jm
S = R + Qi s n i − nQ
 
jn = n 1+ −1 i
m
(1 + i)n − 1
 
S=R Tr = Ra n r − P
i
Pn
xi
S = Rs n i x̄ = i=1
n
Pn
xi wi
P = Ra n i x̄w = Pi=1n
i=1 wi
n
(1 + i)n − 1
  X n(n + 1)
P =R i=
i(1 + i)n i=1
2
sP
  n
i=1 (xi − x̄)
n(n − 1) 2
A = nR + Q S=
2 n−1

y = a + bx

c
UNISA 2019

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