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Advanced Business Calculations Level 3/Series 4 2008 (3003)

Advanced Business Calculations Level 3/Series 4 2008 (3003)

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Published by Hein Linn Kyaw

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Published by: Hein Linn Kyaw on Jul 06, 2010
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Model Answers
Series 4 2008 (3003)
For further informationcontact us:Tel. +44 (0) 8707 202909Email. enquiries@ediplc.comwww.lcci.org.uk
LCCI International Qualifications
Advanced BusinessCalculationsLevel 3
Advanced Business Calculations Level 3
Series 4 2008
How to use this booklet
Model Answers have been developed by EDI to offer additional information and guidance to Centres,teachers and candidates as they prepare for LCCI International Qualifications. The contents of thisbooklet are divided into 3 elements:(1) Questions reproduced from the printed examination paper (2) Model Answers summary of the main points that the Chief Examiner expected tosee in the answers to each question in the examination paper,plus a fully worked example or sample answer (where applicable)(3) Helpful Hints where appropriate, additional guidance relating to individualquestions or to examination techniqueTeachers and candidates should find this booklet an invaluable teaching tool and an aid to success.EDI provides Model Answers to help candidates gain a general understanding of the standardrequired. The general standard of model answers is one that would achieve a Distinction grade. EDIaccepts that candidates may offer other answers that could be equally valid.© EDI 2009All rights reserved; no part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwisewithout prior written permission of the Publisher. The book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover, other than that in which it ispublished, without the prior consent of the Publisher.
3003/4/08/MA Page 1 of 9
Rajesh deposits £15,000 in a bank account at 4% per annum simple interest.(a) How much interest will Rajesh have earned after 3 years and 56 days?(4 marks)Rajesh deposits a further £15,000 in another account at 4% per annum compound interest, for thesame period. Interest is added annually and at the end of the period, and is calculated as compoundinterest throughout.(b) How much more interest will Rajesh have earned from this account than from the simple interestaccount?(6 marks)
(a) 56 days = 56 / 365 years = 0.15342466 yearsInterest = PRT/100 = 15,000 x 4 x 3.15342466 / 100 = £1,892.05(b) Amount = Principle x (1 + percentage rate)
Number of years
 Amount = 15,000 x (1.04)
= £16,974.80Interest = 16,974.80 – 15,000 = £1,974.80Greater than simple interest by: 1,974.80 - 1,892.05 = £82.75

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