VCE General & Further Maths Question Thread!

[Aaron]

Aaron, I have tried to attempt the question my self as well before I posted for help on Atar Notes. The answer I got was the same as Galaxies. However, in the book, they give a different answer so I am completely confused what is right and what is wrong.

That's all cool, so show us your working out and how you got your answer so we can address it and tell you whether the book is right/wrong.

This is what I mean by 'showing effort' - if you believe the book is wrong or you're confused.. show us what you have and we can tell you whether you're right or not. It's a bit difficult without any working out from your end!

And.. if the book ends up being correct, showing working out means that we can tell you the exact point where you may have miscalculated or done something slightly wrong. It's a win-win!

Your working out doesn't have to be in LaTeX either - so if that's what you're worried about.. don't stress. You can attach a screenshot/photo of your working out (or upload via imgur.com and provide link) or even type it out. We should be able to interpret what you're trying to do, as long as it's step-by-step.

[dream chaser]

That's all cool, so show us your working out and how you got your answer so we can address it and tell you whether the book is right/wrong.

If you really want me to show you how I did it, I'll show you.

First, you find the selling price of the house. I did this by using the financial solver on the CAS and substituting all the values I knew to find the unknown, which in this case on my CAS was PV(the present value). I got an answer of $229994.24. Then to find interest, you multiply 12 x 30 x 1384 - the selling price of the house - 50000. I wasn't sure if 50000 should be reduced or not. However, now i know. Thank you Galaxy for the help

The hard copy of the book says the answer for part (b) is $318245.76 whilst the answer of the online version of the book is $268245.76.

MOD EDIT: MERGED DOUBLE POST

[Aaron]

If you really want me to show you how I did it, I'll show you.

First, you find the selling price of the house. I did this by using the financial solver on the CAS and substituting all the values I knew to find the unknown, which in this case on my CAS was PV(the present value). I got an answer of $229994.24. Then to find interest, you multiply 12 x 30 x 1384 - the selling price of the house - 50000. I wasn't sure if 50000 should be reduced or not. However, now i know. Thank you Galaxy for the help

If your question had've included this working out and the question "I wasn't sure if 50000 should be reduced or not", we could've told you straight away without other users trying to decrypt what you're actually asking. So your understanding was OK up to that point.. so your actual question was relating to the 50000. Something to keep in mind for future questions! Straight to the point works wonders 

Asking the right question is often just as (if not more) important as asking a general 'help me with q5' type of question. You build on your conceptual understanding rather than simply remembering how to rote learn the formula/procedure which imo has minimal learning gain.

[dream chaser]

Hi,

Would someone be able to explain to me how annuity works. I know that there is a formula used for it: Vn+1=RVn - D and that it is used to describe how much money is left in an investment. But I don't get the context of it or how it is used. For instance, I don't understand why the D value(payment received) minuses the value of the annuity. If someone is receiving money from the bank or insurance company, wouldn't there be more money in the investment?

Would appreciate all help given

Thanks 

[redpanda83]

Hi,

Would someone be able to explain to me how annuity works. I know that there is a formula used for it: Vn+1=RVn - D and that it is used to describe how much money is left in an investment. But I don't get the context of it or how it is used. For instance, I don't understand why the D value(payment received) minuses the value of the annuity. If someone is receiving money from the bank or insurance company, wouldn't there be more money in the investment?

Would appreciate all help given

Thanks 

Think from the bank prespective.
You have x amount of money with you which someone gave to you(investment)
Now every n days/weeks/years you are giving D payment to the investor. Thus -D, if the investor adds payment to the investment it would be +D.

[dream chaser]

Think from the bank prespective.
You have x amount of money with you which someone gave to you(investment)
Now every n days/weeks/years you are giving D payment to the investor. Thus -D, if the investor adds payment to the investment it would be +D.

Oh okay, so for annuities, think of it in terms of a bank perspective, not the person investing perspective?

[redpanda83]

Hi,

Would someone be able to explain to me how annuity works. I know that there is a formula used for it: Vn+1=RVn - D and that it is used to describe how much money is left in an investment. But I don't get the context of it or how it is used. For instance, I don't understand why the D value(payment received) minuses the value of the annuity. If someone is receiving money from the bank or insurance company, wouldn't there be more money in the investment?

Would appreciate all help given

Thanks 

Take this scenario,
you invested $1000 in a bank. Lets ignore interest rate just for now.
if bank said every months they will give you payment of $10.
you will gradually lose money from the $1000, on a realistic interest rate xD.
So, in this scenario Vn<V0. as some money is always given to you per n period.
and the difference between the money you gained and the initial amount = interest earned.
Scenario 2,
this time you will be putting D payment in the bank instead of recieving payment. so D is added onto V0.
...
on the cas, think from your perspective. The way i have done and taught others for sign is;
+ if the money is coming into your pocket
- if the money is going out of your pocket.
Always make sure FV and PV have different signs.
And think realistically, think what does negative sign what really means. like there is no such thing as negative money, but what it means is either you are loosing money/ owe money. Right! just look for the meaning and you will be fine

Oh okay, so for annuities, think of it in terms of a bank perspective, not the person investing perspective?

Well, it makes more sense that way to me.
OR i think i am the money xD and what does effect does D has on me.
There are multiple ways!

Mod Edit: Merged posts. Please refrain from double posting as stated in our forum guidelines

[dream chaser]

Take this scenario,
you invested $1000 in a bank. Lets ignore interest rate just for now.
if bank said every months they will give you payment of $10.
you will gradually lose money from the $1000, on a realistic interest rate xD.
So, in this scenario Vn<V0. as some money is always given to you per n period.
and the difference between the money you gained and the initial amount = interest earned.
Scenario 2,
this time you will be putting D payment in the bank instead of recieving payment. so D is added onto V0.
...
on the cas, think from your perspective. The way i have done and taught others for sign is;
+ if the money is coming into your pocket
- if the money is going out of your pocket.
Always make sure FV and PV have different signs.
And think realistically, think what does negative sign what really means. like there is no such thing as negative money, but what it means is either you are loosing money/ owe money. Right! just look for the meaning and you will be fine

Okay. However, I still don't understand why it is -D. If the bank is giving the investor money, wouldn't the value of the investment go up in value and hence, be +D?

[redpanda83]

Okay. However, I still don't understand why it is -D. If the money is giving the investor money, wouldn't the value of the investment go up in value?

no.
well its sign conventions. i will keep them consistent.
so you invested $1000 in bank. Thus out of your pocket and it will have - sign. -1000
Now you recieved payment of D, -1000 +D, lets say D = 10 from previous example.
So v0 = -1000
V1 = -1000+10 = -990.
The fomula is based on from the bank prespective

[dream chaser]

no.
well its sign conventions. i will keep them consistent.
so you invested $1000 in bank. Thus out of your pocket and it will have - sign. -1000
Now you recieved payment of D, -1000 +D, lets say D = 10 from previous example.
So v0 = -1000
V1 = -1000+10 = -990.
The fomula is based on from the bank prespective

Okay. Would the perpetuity formula be based from the bank perspective as well? Also, thanks for the help. Much appreciated 

[redpanda83]

Okay. However, I still don't understand why it is -D. If the bank is giving the investor money, wouldn't the value of the investment go up in value and hence, be +D?

Remember bank is giving the money back to you which in this should be greater than interest earned.
So think a friend gave you some money and asked you to give him some back on weekly basis.
So when you give him the money back, did you end up with more money or less money when you started?

Okay. Would the perpetuity formula be based from the bank perspective as well? Also, thanks for the help. Much appreciated 

Perpetuity is simple dont think much about it. But yeah it is.
D= interest. So no matter after how many period V0 stays the same.
Think a friend gave you the money, and he earns interest of $r. and what you do is basically give him $r xD.

In perpetuity, interest earned by bank = payment you received
this keeps the V0 consistent.
perpetuity is usually used by organisation who provides scholarships.

Also try to graphically represent a annuity and perpetuity over n period. See the pattern yourself how the money changes over time!

Mod Edit: Merged posts. Please refrain from chain posting. If you need to add more to your response, click on the 'modify' button in the top right corner.

[dream chaser]

Also try to graphically represent a annuity and perpetuity over n period. See the pattern yourself how the money changes over time!

Okay. Thank you for your help

[dream chaser]

Hi Guys,

I need help with this question. This is the question:

Jarrod saves $500 per month in an account that pays interest at a rate of 6% per annum, compounding monthly.

(a) If he makes monthly deposits of $500 to the account, how much will he have in the account at the end of 10 years?

My understanding of question: I know for this question, I can use the financial solver to complete it. I know that it involves Annuity, however it also involves increasing the value of the investment as well. Therefore, an annuity investment. As a result of that, on the financial solver(CAS-the TI-nspire notation):

N=120
I(%)=6
PV=?
Pmt=-500
FV=?
PpY=12
CpY=12
PmtAt=END

Btw, PV=Present value of Annuity. In this case, how much is invested. FV=Future value of Annuity.

I know for the question, I need to find FV. That means, PV should be given but I don't think it is. Hence, why I can't complete the question. Could someone please help me 

All help will be appreciated

Thanks

[vceme]

Hi Guys,

I need help with this question. This is the question:

Jarrod saves $500 per month in an account that pays interest at a rate of 6% per annum, compounding monthly.

(a) If he makes monthly deposits of $500 to the account, how much will he have in the account at the end of 10 years?

My understanding of question: I know for this question, I can use the financial solver to complete it. I know that it involves Annuity, however it also involves increasing the value of the investment as well. Therefore, an annuity investment. As a result of that, on the financial solver(CAS-the TI-nspire notation):

N=120
I(%)=6
PV=?
Pmt=-500
FV=?
PpY=12
CpY=12
PmtAt=END

Btw, PV=Present value of Annuity. In this case, how much is invested. FV=Future value of Annuity.

I know for the question, I need to find FV. That means, PV should be given but I don't think it is. Hence, why I can't complete the question. Could someone please help me 

All help will be appreciated

Thanks

I haven't done this in a looooong time but reading the question, you're right- they don't give you the PV value. It might be right to assume that the PV value  just starts with 0. What's the answer? ^{This might be wrong so someone please check!!!}

[dream chaser]

I haven't done this in a looooong time but reading the question, you're right- they don't give you the PV value. It might be right to assume that the PV value  just starts with 0. What's the answer? ^{This might be wrong so someone please check!!!}

I don't think that PV will be zero as the investment will not simply increase by not giving anything to the bank/insurace company in the first place. The answer is $81939.67.