MTH112ModelAnswerMidTermSpring2016.docx - October...

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October University for Modern Sciences & Arts (MSA) Faculty of Management Sciences Module Title: Basic Mathematics Mid Term Exam - Spring 2016 Module Code: MTH112 Model Answer Answer all questions: (Total Marks 100) Problem 1: (25 marks) Sally plans to travel to Turkey 4 years from now for a shopping spree. She wants to accumulate $10000 for the trip. She could invest some money in an account which earns interest at the rate of 12 % per year compounded monthly. (a) How much money should she deposit today in order to have the money needed for the trip in time? (Give your answer to the nearest cent). (12marks) mt m r P A ) 1 ( $ 60 . 6202 ) 12 12 . 0 1 ( 10000 ) 4 ( 12 P P (b)How much interest (to the nearest cent) will she earn? (5marks) $ 40 . 3797 60 . 6202 10000 P A I (c) If she can afford to invest $8000 in the above account, how long will it take her to accumulate the money required to travel?(Give your answer to the nearest year) (8marks) mt m r P A ) 1 ( t 12 ) 12 12 . 0
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