Mathematics of Finance – 2

1. Given the scenario in the spreadsheet below, what Excel formula is required for NPV

2. If the MP of a laptop is $22,000 and the sales tax imposed is 16%. The total amount that has to pay is

Explanation: $22000+22000*0.16=25520$

3. A sum of $\$30,000$ is invested at a nominal rate of 12\% per annum. Find its value after 3 years if interest is compounded every month. Give your answer to the nearest $.

4. The economic order quantity (EOQ) for a particular stock item is given by the expression EOQ = $\sqrt{\frac{2C_0D}{c_h}}$. If for a different stock item, EOQ = 200 items, $C_0=4$ per order and $D=1000$ items, then $C_h$ (in $\$$ per item) will be

5. The tax charged on all incomes during the financial year from 1st July to 30th June is termed as

6. To pay a certain amount of tax as a value-added tax on the purchase of an item is known as

7. A company has to choose between borrowing 100,000 at 3% a quarter in order to modernize now or saving at 2% a quarter in order to modernize in 4 years’ time, at an estimated cost of 1170,00. Throughout this question, use tables whenever possible. Find the cumulative discount factor appropriate to quarter end payments of $1 per quarter at 3% per quarter over 4 years.

8. Calculate the present value of an annuity of 2800 per annum, payable at the end of each year for 10 years at a discount rate of 4%. Use tables and give your answer to the nearest $.

9. The salary received after necessary deductions from the gross salary is termed as

10. A motorbike price is $40,000 inclusive of 16% sales tax. The original price should be

11. Given the scenario in the spreadsheet below, what Excel formula is required for ROI

12. An item sells for 4.39 including value-added tax at 17.5%. If the tax were reduced to 16%, the new selling price to the nearest penny will be

13. The economic order quantity (EOQ) for a particular stock item is given by the expression $EOQ = \sqrt{\frac{2C_0D}{c_h}}$. If $C_0=2$ per order, $D=1000$ items and $C_h=0.25$ per time, then EOQ (rounded to the nearest whole number) will be

14. An asset originally worth 80,000 depreciates at 28% per annum. Find its value to the nearest at the end of 3 years.

15. A company has to choose between borrowing 100,000 at 3% a quarter in order to modernize now or saving at 2% a quarter in order to modernize in 4 years’ time, at an estimated cost of 1170,00. Throughout this question, use tables whenever possible. Calculate the amount $X$ which mush be paid per quarter if the company borrows 100,000 now repayable at the end of each quarter over 4 years. Give your answer correct to the nearest $.

16. The price of a tricycle is $2,900 and the sales tax is 16%. The amount of sales tax on 40 such tricycles should be

17. If a sum of 15,000 is invested at 4.6 percent per annum, find its value after 5 years, to the nearest $.

18. A company has to choose between borrowing 100,000 at 3% a quarter in order to modernize now or saving at 2% a quarter in order to modernize in 4 years’ time, at an estimated cost of 1170,00. Throughout this question, use tables whenever possible. Calculate the amount $Y$ which must be saved at the end of each quarter if the company wishes to cover the cost of modernization in 4 years’ time. Give your answer to the nearest $.

19. An investment rises in value from 12000 to 250,000 over 15 years. Calculate the percentage increase per year, to one d.p.

20. Rearrange the formula $V=P(1+r)^n$ to make $r$ the subject.