Your mom decides to buy you a car of R146 000.00


1. A newspaper company buys a printing press for R 179 800 in 2003. They decide that the printing press should be replaced in 7 years- time.

a) If the machine depreciates at a rate of 7,6% per year, what will the value of the printing press be in 7 years-time?

b) If the value of the printing press appreciates by 5,98% per year, what will the value of a new printing press be in 7 years-time?

 2.

c) What is the total amount that the company should save in a sinking fund?

d) What will the monthly instalments be if the company uses this amount for their sinking-fund and the bank gives them an interest rate of 11,58% compounded monthly?

Your mom decides to buy a new car. She buys a car that costs

R146 000 in total including all the administration costs. She decides that the next time she buys a car she would like to pay for it in cash.

a) If her current car depreciates at a rate of 6,32%, how much will her car be worth in 4 years-time?

b) If she buys the same type of car in 4 years-time and it appreciates at a rate of 7,13%, how much will the new car cost?

c) What amount should your mom have to save in a sinking-fund in order to buy a new car?

d) If the bank offers an interest rate of 9,34% compounded monthly, what monthly instalment should your mom pay every month?

A coffee shop buys a multi-functional coffee machine for R14 999. They also buy a fire-alarm system for R 12 000. They ask you to help them calculate how much they would need to pay every month in order to upgrade their coffee machine and fire-alarm system in 5 and a half years-time. They tell you that a coffee machine depreciates at a rate of 3,78% per annum and a fire-alarm system depreciates 11,75% per annum. A coffee machine’s value appreciates at a rate of 6,4% per annum and a fire-alarm system’s value appreciates at a rate of 7,9% per annum. If the bank gives an interest rate of 14,34% compounded quarterly what will the coffee shop’s quarterly instalments be?

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