2012 November Mathematics P1 | Grade 12 | Financial Maths related statements & questions.


A business buys a machine that costs R120 000. The value of the machine depreciates at 9% per annum according to the diminishing-balance method.

Determine the scrap value of the machine at the end of 5 years. 

After five years the machine needs to be replaced. During this time, inflation remained constant at 7% per annum. Determine the cost of the new machine at the end of 5 years. 

The business estimates that it will need R90 000 by the end of five years. A sinking fund for R90 000, into which equal monthly instalments must be paid, is set up. Interest on this fund is 8,5% per annum, compounded monthly. The first payment will be made immediately and the last payment will be made at the end of the 5-year period.

Calculate the value of the monthly payment into the sinking fund. 

Lorraine receives an amount of R900 000 upon her retirement. She invests this amount immediately at an interest rate of 10,5% per annum, compounded monthly.

She needs an amount of R18 000 per month to maintain her current lifestyle. She plans to withdraw the first amount at the end of the first month.

For how many months will she be able to live from her investment?

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