Question 1
A company wants to spend $250 000 on extensions to its showroom. A financial adviser suggests that
the company takes out an interest-only loan at a flat interest rate of 12% per annum for 9 years.
(a) (i) Show that the interest charged on the i
Question 1
Heather wants to save $15 000 for an overseas trip in 3 years time.
(a) Heather calculates that, if she saves $90 each week, she will reach her savings goal of $15 000 in 3
years.
(i) Show that Heather has secured an interest rate of approximat
QUESTION 1
Company DHB issued 4 million 50c ordinary shares and 500 000 $2 8% preference shares. In its first
year of operation the company made a profit of $450 000. The directors decided to keep 27% of the
profit for taxation and to distribute the rest
QUESTION 1
Norman, a self-employed welder, is setting up his first superannuation account. He will be
contributing $3000 per quarter to the account, which has an interest rate of 7.7% per annum,
compounded quarterly.
(a) Show that Norman can expect to hav
QUESTION 1
John and Mary have borrowed $90 000 to buy a block of land as an investment. If they make interestonly payments at the end of each year they will be charged a flat interest rate of 7.8% per annum on
the loan over 5 years.
(a) (i) Calculate the
Question 1
Hudson has taken out a $350 000 home loan from a bank in order to buy his first home. The loan is
to be repaid over 25 years and the current interest rate is 6.44% per annum, compounded monthly.
(a) (i) Show that Hudsons monthly repayment will
Question 1
Jackson has taken out a loan for $180 000 in order to buy his first home. The current interest rate for
a home loan is 5.2% per annum, compounded monthly.
(a) Calculate Jacksons monthly repayment if the term of the loan is 30 years. (2 marks) (
Question 1
The Uniforms for All company has a total market capitalisation of $6 000 000, made up of 900 000 $4
12% preference shares and 1 600 000 $1.50 ordinary shares. In the previous year Uniforms for All
made a profit of $2 600 000. The directors deci
Question 1
Greg is 23 years old and is setting up his first superannuation account. A payment is made each
quarter into an account that has an interest rate of 7.3% per annum, compounded quarterly. Greg
earns $32 000 annually. Greg contributes 3% of his e
QUESTION 1
Samuel wants to borrow $13 500 so that he can buy a new car. He plans to pay off the loan over 5
years. He is considering the loan options offered by the following banks:
Bank A: a nominal interest rate of 8.5%, compounded monthly, with a month