Financial Math Answers

For a business firm leverage is about the fixed operating cost and the fixed finance costs in the cost structure of the firm. For the given details, identify for which firm the degree of operating leverage and degree of financial leverage are higher and why so:

Firms Amrit Baayu

Sales (Rs.) 360000 750000

Variable cost p.u 20 150

Fixed cost (Rs.) 72000 140000

Output (units) 6000 1500

Interest 40000 80000

Emmerson invests N$100,000.00 on a monthly basis, at the end of each month at an interest rate of

8.5% compounded quarterly.

a) How much will he have after 3.5 years?

(6)

b) How much interest does he earn on a monthly basis? (Hint: Calculate the monthly average).(4)

Question (1)

[5 marks]

Armando is selling rulers. He bought rulers at 0.20c each, and sold them (except for broken ones)

at N$1.10 each to make a profit of N$306.50. The number of broken rulers is 38. How many rulers

did he buy?

Frank needs to pay R60 000,00 towards his son’s university fees in three years’ time. If he has R46 150,30 now, at what interest rate per year compounded monthly, must he invest his money?

Jason works at PetCo Refinery for $12.50 per hour He Overtime pay (time and a half for alLhours over 40 that he works in a week If he works holidays , he gets double time for the hour in that day, but they are not counted foward overtime The table below shows the hours that Jason worked in the last two weeks a. What would be his gross pay for the two weeks? b. What will be his net pay for the two weeks following deductions (income tax for a married filing jointly, social security 6.2% of gross, Medicare 1.45% of gross retirement fund 3% of gross)?

week 1

8hrs 8hrs 8hrs 8hrs 8hrs 8hrs

week 2

8hrs 10ths 8hrs Christmas holiday 8hrs 8hrs 8hrs

Suppose John deposited an amount of R600 at the end of every month into an account earning

6% interest per year, compounded monthly over a period of 3 years. Determine the accumulated 

amount John will receive at the end 3 years. 

Kgomotso bought a townhouse for R1 395 000. She managed to secure a loan at an interest rate of 11,35% per year, compounded every six months, for a period of 20 years. Determine the periodic payments Kgomotso must make.

Suppose John deposit an amount of R600 at end of every month into an account earninng 6% interest per year,compounded monthly over a period of 3 years.Determine the accoumulated amount John will receive at the end of 3 years.

Parisa's cell phone plan has a monthly fee of $95, which includes

unlimited free text messages and phone calls and 5GB of data. Each extra

gigabyte of data, or part thereof, costs $14. Find the cost of a month in which Parisa used 6.2GB of data.

8 Kgomotso bought a townhouse for R1 395 000. She managed to secure a loan at an interest rate of 11,35% per year, compounded every six months, for a period of 20 years. Determine the period payments Kgomotso must make. [1] R50 031,39. [2] R29 501,98. [3] R88 943,68. [4] R14 732,77.