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October 21, 2025, 05:10:44 pm
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Author Topic: Financial Maths Q  (Read 1096 times)  Share 

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BubbleWrapMan

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Financial Maths Q
« on: July 02, 2011, 11:16:19 pm »
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The local store advertises a stereo for $1095, or $100 deposit and $32 per week for two years.
(a) How much does the stereo end up costing under this scheme?
Ans: $3428
(b) What equivalent rate of simple interest is being charged over the two years?
Ans: 117.24% p.a.

I don't understand what part b is asking. Help is appreciated. =)
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Tim Koussas -- Co-author of ExamPro Mathematical Methods and Specialist Mathematics Study Guides, editor for the Further Mathematics Study Guide.

Current PhD student at La Trobe University.

onur369

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Re: Financial Maths Q
« Reply #1 on: July 03, 2011, 12:16:36 am »
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Hey isnt A supposed to be 100 + (32x(54x2)) = $3556
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TrueTears

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Re: Financial Maths Q
« Reply #2 on: July 03, 2011, 12:23:59 am »
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Quote from: onur369 on July 03, 2011, 12:16:36 am
Hey isnt A supposed to be 100 + (32x(54x2)) = $3556
100+(32*52*2)

as for the actual q, i dont think the answer is correct for b) ;)
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BubbleWrapMan

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Re: Financial Maths Q
« Reply #3 on: July 03, 2011, 12:40:31 am »
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I would have thought so. What would you say is correct then? Just to be sure. =P
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TrueTears

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Re: Financial Maths Q
« Reply #4 on: July 03, 2011, 12:58:55 am »
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the q is analogous to investing $1095 at an interest rate of i% p.a and the future value of this cash is $3428 in the future.

3428 = 1095(1+i(2))

solve for o i ;)
« Last Edit: July 03, 2011, 02:50:24 am by TrueTears »
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PhD @ MIT (Economics).

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