Recursion and Financial Arithematics

William borrowed $20,000 to buy a car. Interest on this car was 6.5% compounded quarterly. William will fully repay this loan with 20 quarterly payments. Immediately after the 19th payment, William still owes $1,167.50. The value of his final payment rounded to the nearest cents will be:

• $1,000.00

• $1,167.50

• $1,186.47

• $1,243.39

• $1,300.00

Which one of the following depreciation situations does this graph best represent?

• flat rate depreciation with a decrease in depreciation rate after two months

• flat rate depreciation with an increase in depreciation rate after two months

• unit cost depreciation with a decrease in units used per month after two months

• reducing balance depreciation with an increase in the rate of depreciation after two months

• reducing balance depreciation with an decrease in the rate of depreciation after two months

Three lines of an amortization table for a reducing balance loan with monthly repayments are shown below. If the interest in the 23rd month was to increase by 2% per annum calculate the interest in the 23rd month to the nearest cent.

• $44.63

• $89.25

• $133.88

• $178.51

• $187.43

A car originally costs $20,000 and is depreciated by k% per annum in the 1st to 5th year. In the 6th year it is depreciated by 10 cents per km. The value of the car after it travels 15000km is $8525. The value of k% is:

• 13%

• 14%

• 15%

• 16%

• 17%

Ray deposited $30,000 in an investment account earning interest at the rate of 2.8% per annum, compounding semiannually. A rule for the balance, Rn , in dollars, after n years is given by:

• $30,000×1.028^n$

• $30,000×1.014^n$

• $30,000×1.028^{2n}$

• $30,000×1.014^{2n}$

• $30,000×1.056^{0.5n}$