Question one

Determine the future value of Ksh. 30,000 invested at a bank for eleven and half years at an
interest of 12% p.a. compound interest. Interest payable;
i. Semi-annually (3 marks)
ii. Quarterly (3 marks)
iii. Continuously (3 marks)
iv. Calculate the effective interest in each case (3 marks)

Question two
A manufacturer produces three models of bicycles. The time (in hours) required for assembling,
painting, and packaging each model is as follows.

The total time available for assembling, painting, and packaging is 4006 hours, 2495 hours and
1500 hours, respectively. The profit per unit for each model is $45 (Model A), $50 (Mod el B),
and $55 (Model C). How many of each type should be produced to obtain a maximum profit?
(9 marks)
Question three

Determine;
The market shares one month and two months from now. (6 marks)
The long run probabilities (3 marks)