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BUS101
Introduction to Math for Business
Final Examination - THE – Version B

2019-2020 /Summer Semester

Number of Exam Pages: 15 Time Allowed: 48 hours
including this cover sheet ((

Question Total grade allocated Student’s

Marker Name and Signature
Number for this question earned grade
Question 1 20
Question 2 20
Question 3 20
Question 4 20
Question 5 20
Total in Figures 100
Total in Letters
Grades
Instructions
1. This examination consists of Five questions. You are required to answer all questions.

2. Keep in mind that any form of cheating will not be tolerated and will subject you to AOU
cheating policy.

3. Show all calculations in your answers

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BUS101 – VER B SUMMER 2020
 Take Home Exam for Final Assignment 2019-2020/Summer

BUS101 - An Introduction to Business Math for Business

Cut-Off Date : 24thAugust 2020 Cut off Time: 2:05 PM

Total Marks : 100 Duration:48 Hours

Contents:

Warningsand Declaration……………………………………….…………………………………………………………….... 2
Question1 ……….…………………………………………………………………………………………….…………………….…. 3
Question 2 ……………………………………………………………………………………………………………….………………5
Question3...………………………………………………………………………………………………………………………………6
Question 4 ………….…………………………………………………………………………………………………………….……….8
Question 5………………………………………………………………………………………………………………………………….9
Table Values……………………………………………………………………………………………………………………………11– 15

Plagiarism Warning:
As per AOU rules and regulations, all students are required to submit their own THE-Final work and avoid
plagiarism. The AOU has implemented sophisticated techniques for plagiarism detection. You will be penalized for
any act of plagiarism as per the AOU's rules and regulations.

Declaration of No Plagiarism by Student (to be signed and submitted by student with THE-Final work):
I hereby declare that this submitted THE-Final work is a result of my own efforts and I have not
plagiarized any other person's work.

Name of Student: -------------------------------------------------------------------------

Student ID No.----------------------------------------------------------------------------

Signature: …………………………..…………………………………………………………………..

Section No. ------------------------------------------------------------------------------------

Date:………………………………………………………………………………………………….…………

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BUS101 – VER B SUMMER 2020
Question 1:(20 points)

A- An employee is working 6 days a week from Monday to Saturday. Assume the

overtime for the employee is double after 40 hours. The following
table shows his working hours. (7 points)

a) Complete the table below (Show your work)

M T W Th F Sa Total
Regular Overtim Regular Overtime
Hour
Hours e Hours Rate Rate
s
12hr 12hr 10hr 10hr 10hr 2 hr ?? ?? ?? $ 15.50 ??

Total working hours=56

Total regular hours=40
Overtime hours=16
Overtime rate=15.5*2.5=23.25

b) Find the gross earning of the employee.

Gross earning= 40*15.5+ 16*23.25=992$

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BUS101 – VER B SUMMER 2020
 B- Hamda is a salesclerk who receives a salary of $650 per week plus a commission of 6%
on all sales exceeding $45,000. During a five-week period she sold products worth
$80,000, what were Hamda 's gross pay? (6 points)

salary=650*5=$3250
commission=(80000-45000)*0.06=2100$
gross pay= 3250+2100=5350$

C- Omar assembles computer boards for an electronics company. He is paid on the

following differential pay scale:
Units produced Amount per unit
1 – 50 $ 1.75
51 – 160 $ 2.15
161 – 200 $ 3.90
Over 200 $ 7.25
If he made 210 boards in a week, how much is his gross pay? (7 points)
(Round your answer to the nearest hundredth)

Gross pay= 50*1.75+110*2.15+40*3.90+10*7.25=$552.5

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BUS101 – VER B SUMMER 2020
Question 2:(20 points)

A- A businessperson took out a loan of $ 135,000 from the Bank at a simple interest rate of
7% on June21, which is due on August22. (7 points)
a) Find the number of days of the loan from June 21 until August 22.
b) Using exact interest, find the interest amount (I=?).
A) June=9
B) July=31
C) August=22
Number of days= 9+31+22=61
B) I = PRT
= 135000( 0.07)(61/365)=1579.31 $

B- A dealer borrowed $9000 on a 110-day 1.5% simple interest note. He paid $1000 toward
the note on day 30. On day 80 he paid an additional $1000. Assume 360-day year, what is
his ending balance due? (7 points)

I=PRT=9000*0.015*30/360=11.25
Amount on day=11.25+9000-1000= 8011.25$
I=PRT=8011.25*0.015*(50/360)=16.69$
Amount on day 80= 8011.25+16.69-1000=7027.94$
I=PRT= 7027.94*0.015*(30/365)=8.66$

Ending balance= 8.66+7027.94=7036.6$

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BUS101 – VER B SUMMER 2020
 C- A Supplier borrowed $78,900. The loan was for 18 months at a simple interest rate of
5%. What is the interest andthe maturity value? (6 points)

Interest=prt = 78900*0.05*18/12=5917.5$

Maturity= P+I= 78900+5917.5=84817.5$

Question 3:(20 points)

A- A man deposits $31,150 into a bank, which pays 8% interest that is compounded
quarterly. What will he have in his account at the end of three years?(7 points)

P= $31150, r=0.08 , n=3

A=p (1+r/4/100)^4n
A= 31150(1.0002)^12 = 31224.84 ans.

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BUS101 – VER B SUMMER 2020
 B- The owner of a small factory thinks that he will need $28,900 for new equipment in 10
years. He decides that he will put aside the money now so that after 10 years the $82,500
will be available. His bank offers him 4% interest compounded semiannually. What is the
present value of the $82,500? (6 points)

P=$82500 ,r=0.04,n=10
A= p(1+R/6/100)^60

A= 82500( 1.00007)^60=82847.2 ans.

C- A person deposited $35,000 at a bank at an interest rate of 8% compounded quarterly.

Find the effective rate (APY). Write your answer in percentage rounded to the nearest
hundredth. (7 points)

Period=1*4=4
Rate per period=8/4=2%
Table factor=1.0824
Compound value= 35000*1.0824=37884$
Interest=37884-35000=2884$
APY=2884/35000=0.0824 or 8.24%

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BUS101 – VER B SUMMER 2020
Question 4:(20 points)

A- A company borrowed $67,000. The company plans to set up a sinking fund that will pay
back the loan at the end of 8 years. Assuming a rate of 6% compounded semiannually,
find the Sinking Fund of the ordinary annuity. (7 points)

P=$67000 , n=8 , r=0.06,m=6

A= p(1+r/m)^nm/r/m

A= 67000* (1.01)^48/1.01= 106950 ans.

B- An employee decided to invest $2,186quarterly for seven years in an ordinary annuity at

12%. What is the total cash value of the annuity at end of year 7? (7 points)

P= $2186 , n= 7,r=12% or 0.12

A= p(1+r/4/100)^4n
A= 2186(1+0.003)^28 = 2377.26 ans.

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BUS101 – VER B SUMMER 2020
 C- What must YOU invest today to receive an annuity of $5,200 for 6 years compounded at
12% quarterly when all withdrawals will be made at the end of each period?(6 points)

Annuity=$5200
N=6,i-=0.12
A=P (1+r/4/100)^4n

A=5200(1+0.0003)^24=5237.56 or 5238 ans.

Question 5:(20 points)

A- A university graduate bought a new car. The cash price is $41,500; he made a $4,000
down payment on it. The bank's loan was for 24 months. Finance charges totaled $
13,000. What was the monthly payment? (8 points)

Total car price= 41500+13000=54500

Total car price after down payment=54500-4000=$50500

Price after down payment bank loan=50500/24= 2104.167 $

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BUS101 – VER B SUMMER 2020
 B- A steel factory bought a new equipment. The cash price of the equipment is $21,000,
putting down $5,700 and financing the remainder with 22 monthly payments of $780
each. Find the APR by table lookup. (8 points)

Amount financed=21000-5700= 15300$

Total payments=22*780=17160$
Finance charges= 17160-15300=1860$
= 1860/15300)*100=1.22%

C. A university graduate bought a new car. The cash price is $23,000; he made a $2,100
down payment on it. The bank's loan was for 18 months. Finance charges totaled $6,100.
What was the monthly payment? (4 points)

Total car price= 23000+6100=29100$

Total car price after down payment= 29100-2100=27000$
Price after down payment bank loan = 27000/18=1500$

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BUS101 – VER B SUMMER 2020
 End of Questions

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