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March 29, 2024, 10:30:59 am

Author Topic: Further 3/4 Financial Maths 2014 VCAA Exam Question  (Read 2329 times)  Share 

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sam777

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Further 3/4 Financial Maths 2014 VCAA Exam Question
« on: February 20, 2022, 02:34:35 pm »
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Hi,

I don't understand what was done in this question attached below?
For one, how are we meant to know it was flat rate and not compound interest if the question didn't say which?
From looking at both the question and the worked solution provided by VCAA, I sill don't understand what they did in the second step. Is this something from the old study design?

Commercekid2050

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Re: Further 3/4 Financial Maths 2014 VCAA Exam Question
« Reply #1 on: February 20, 2022, 02:42:53 pm »
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Hi,

I don't understand what was done in this question attached below?
For one, how are we meant to know it was flat rate and not compound interest if the question didn't say which?
From looking at both the question and the worked solution provided by VCAA, I sill don't understand what they did in the second step. Is this something from the old study design?

We know it is flat rate as it says "Payment of 180 Per Month" though it is not clear this would implied it is flat rate. The other is effective interest rate. It is weird they do it by hand as I am pretty sure it can be found by cas. It just changes the date from per month to yearly.

Hope this helps
2021 VCE- English, Math Method, Further Math,Accounting and Economics

2022-2026 Bachelors in Business (Taxation) and Accounting in Monash

sam777

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Re: Further 3/4 Financial Maths 2014 VCAA Exam Question
« Reply #2 on: February 20, 2022, 07:36:46 pm »
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We know it is flat rate as it says "Payment of 180 Per Month" though it is not clear this would implied it is flat rate. The other is effective interest rate. It is weird they do it by hand as I am pretty sure it can be found by cas. It just changes the date from per month to yearly.

Hope this helps

I don't understand how the payment of 180 part indicates that it is flat rate interest. You can have payments of 180 a month for reducing balance loans too right?

Commercekid2050

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Re: Further 3/4 Financial Maths 2014 VCAA Exam Question
« Reply #3 on: February 20, 2022, 09:46:27 pm »
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I don't understand how the payment of 180 part indicates that it is flat rate interest. You can have payments of 180 a month for reducing balance loans too right?

Yeah true you can but it would also talk about how much it would compound or at least mention it. In this case it just talks about repayment. Whenever we hear repaint it generally means flat rate
2021 VCE- English, Math Method, Further Math,Accounting and Economics

2022-2026 Bachelors in Business (Taxation) and Accounting in Monash