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to grow into $25 000 if the money was invested in a capital growth fund returning 8.6 % pa interest with fortnightly rests. What is the effective interest rate for this investment.

25 ) 22

ANSWER:

38.71 fortnights

Effective Rate: Invest $1 for 1 year (26 fortnights): FV 1(1 + 0.086 / 26) 26 = = 1.08965 Interest earned on $1 for 1 year = 1.08965 1 = ANSWER: Effective interest rate = 8.965% $0.08965

b) Compare the effective interest rate of these two investments. A simple interest investment of 14 % over 4 years AND an investment paying 11.25 % pa compounding weekly over the same time period. SIMPLE INTEREST INVESTMENT Assume $1 is invested @ 14% simple interest for 4 years. SI = PRT =0.14 4 1 = 0.56 A =0.56 = 1+ 1.56 Determine rate of annual compound interest that would return the 1.56 after 4 years:

1.56 1(1 + i ) 4 = = 4 1.56 1 i i = 0.1176

ANSWER: effective rate = 11.76% compound interest p.a COMPOUND INTEREST INVESTMENT Invest $1 @ 11.25% compounding weekly

0.1125 52 A= 1(1 + ) = 1.11894 52 I = 1.11894 1 = 0.11894

c ) What is the current value of 3 future payments you owe the bank if the payments are: Payment 1 $ 5500 in 8 weeks from now (Assume a discount rate of 1.7 % pa compounding daily applies.) FV = PV (1 + i ) n 5500 PV (1 + 0.017 / 365)87 = 5500 PV = (1 + 0.017 / 365)56 PV = 5485.67 Payment 2 $ 3800 in 12 months time

3800 (1 + 0.017 / 365)365 PV = 3735.95 PV =

PV = 5485.67 + 3735.95 + 4059.60 = 13281.22

ANSWER:

PV=13281.22

Question 2 a) The first term of a GP is 10 and the fifth term is 160. Find the geometric sequence and hence ( i ) the 4th term. And ( ii ) the Sum of the first 8 terms.

tn = ar n 1

t= 10 a = 10 1 t5= 160 10r 51= 160 r 4= 16 r= 2 I will assume r=2 (Strictly speaking r could also be -2) t= 10 2n 1 n i)

t4 = 241 = 10 80

a (r n 1) r 1 ii) 10(28 1) = = 2550 S8 2 1 Sn = b) Find the sum of the following geometric sequence: 1 + 0.8 + 0.64 + for 10 terms a =1 t 0.8 = = r 2 = 0.8 t1 1

Sn = a (r n 1) (r 1)

Question 3 a) Calculate the following present value annuity factors. i) a10 / 0.06 ii) a12 / 0.075 1 (1 + i ) n i 1 (1.075) 12 1 (1.06) 10 a12 0.075 = = 7.360 a10 0.06 = = 7.735 0.075 0.06 b) Find the present value of an immediate annuity which offers payments of $350 a month for 8 years where an interest rate of 9% pa applies. Clearly state the significance of the value you have just calculated. an i = PV= p an i 1 (1 + 0.09 /12) 128 = 350 0.09 /12 = 23890.45 There are several ways of interpreting this result.

1. $23890.45 is the amount you could borrow today and repay over 8 years with monthly repayments of 350 @ 9% compounding monthly. After 8 years of payments the loan would have been repaid. 2. $23890.45 is the amount you could invest today @ 9% compounding monthly and make a withdrawal of $350 at the end of each month. There would be $0 left after 8 years of regular withdrawals. 3. You could invest a single sum of $23890.45 today @ 9% compounding monthly for 8 years OR start with $0 in the account and make regular deposits of $350 at the end of each month for 8 years. You will end up having exactly the same balance in your account after 8 years with either approach. FV = 23890.45(1 + 0.09 /12)812 = 48949.66 OR 350 FV = S96 0.09/12 (1 + 0.09 /12)96 1 350 48949.65 = = 0.09 /12

c) Mary has $250 000 to invest in an annuity at 8% pa. She is 40yrs old now. Assuming she lives to be 80 yrs old, then, how much per month would she get for this investment. PV= p an i 250000 p = 1 (1 + 0.08 /12) 4012 0.08 /12 250000 p= 1 (1 + 0.08 /12) 4012 0.08 /12 p = 1738.28

Mary can make a monthly withdrawal of $1738.28. The account would be $0 after 40 years of payments.

d) Jason wants an annuity of $500 per fortnight over 10 years. If the interest rate is 6.8 %, what would he expect to pay for the annuity. (Note: I assume the payment occurs at the end of each fortnight) PV= p an i 1 (1 + 0.068 / 26) 1026 0.068 / 26 PV = 94237.21 PV 500 =

(If Annuity Due i.e payment at the start of each fortnight) PV = p an i (1 + i ) 1 (1 + 0.068 / 26) 1026 (1 + 0.068 / 26) 0.068 / 26 PV = 94483.68 PV = 500 Question 4 a) Calculate the following sum of annuity actors. i) S10 / 0.06 ii) S12 / 0.075 Sn i = (1 + i ) n 1 i (1.075)12 1 = = 18.424 S12 0.075 0.075

b) Find the value in 10 years time of 120 monthly payments of $220 made into an account paying 7.5 % pa if the first payment is made immediately. Annuity Due ( i.e payment at start so multiply by extra period of interest (1 + i ) ) FV = p S n i (1 + i ) = 220 (1 + 0.075 /12)120 1 (1 + 0.075 /12) 0.075 /12 = 39389.33

c) Find the value of a superannuation plan with payments of $5000 pa over 25 years at 9% interest. (I will assume payment occurs at the end of each year) FV= p S n i = 5000 (1 + 0.09) 25 1 0.09 = 423504.48

d) Jane wants to retire in 30 years with a lump sum payment of $250 000 from a superannuation investment at 8% pa. What monthly contributions are required? p= = FV Sn i

Question5. What is the domain and range of (i) y= (x+3)/(x-4), (ii) y = (x-4)/( x-1), (iii) y=(x +7x+12) 1 / 2

Skipped Question 6. Which of the following are functions? (i)y = 4 (ii) x=3 (iii) y= x + 2x+1(iv) y=1/x (v) x + y=9 (vi) xy +2x =10(vii) y=4x-2x+1 Skipped Question 7. (a) Find the inverse of f(x) = 3 (x-2)+4. Is the inverse a function? Why or why not? y = 3( x 2) 2 + 4 Swap x and y: x = 3( y 2) 2 + 4

x4 y= 3 OR

0.5

+2

x4 y = +2 3

Not a function. Its graph can be cut at more than 1 point by a vertical line.

(b) Find the inverse of x+y =9. Swap x and y: y 2 + x2 = 9 i.e circle is its own inverse. (c) Find the inverse of y = 3x-9x +4.

(x 1.5) 2 y = 3( x 1.5 x 1.5 x + 1.52 1.52 ) + 4

2

x = y 1.5) 2 2.75 3( Rearrange to make y the subject of the eqn:

x + 2.75 y= 3

0.5

+ 1.5

1 +3 ( x + 2) State (i) the domain (ii) the range (iii) any asymptotes of the function. Now sketch the function.

Question 8.

Domain: All real number except x = 2 Vertical Asymptote: x = 2 Range: All real numbers except y = 3 Horizontal Asymptote: y = 3 y-int (set x=0) 1 y = + 3 = 3.5 2 x-int( set y=0) 1 0= + 3 0 = + 3( x + 2) x = 2.33 1 x+2

Note: The graph SHOULD NOT cross the asymptotes. If they do you will lose some marks.

Question 9 For the relation y= 2 (x-4)^ +3, state the turning point. Sketch the relation. Note: I will assume y = 2 x 4 + 3 is wanted.

Turning pt = (4,3) y-int ( set x=0) y = 4)0.5 + 3 is undefined. No y-int. 2( x-int (set y=0) 0 =2( x 4)0.5 + 3 (1.5) 2 = 4 x x = 2.25 + 4 x = 6.25

Question 10

1 +4. ( x 1) 2 Sketch f(x). What transformations of f(x) result in g(x)? Sketch g(x).

Question 11. Write the equation of a circle with (a) centre at (-2, 5) and a radius of 3. (b) centre (4,5) and radius of 6. ( x B)2 + ( y C )2 = A2 a)

( x 2) 2 + ( y 5) 2 = 32 ( x + 2) 2 + ( y 5) 2 = 9

b) ( x 4) 2 + ( y 5) 2 = 36

Question 12. Find the centre and radius of the circle with an equation (a) x+y-2x + 4y -9=0 (b) 3x+3y-6x -9y +6=0

x2 2 x + y 2 + 4 y 9 = 0 x 2 1x 1x + 12 12 + y 2 + 2 y + 2 y + 22 22 9 = 0 ( x 1) 2 + ( y + 2) 2 1 4 9 = 0 ( x 1) 2 + ( y + 2) 2 = 14

3x + 3 y 6 x 9 y + 6 = 0 3( x 2 2 x) + 3( y 2 3 y ) + 6 = 0 3( x 2 1x 1x + 12 12 ) + 3( y 2 1.5 y 1.5 y + 1.52 1.52 ) + 6 = 0 3( x 1) 2 + 3( y 1.5) 2 3 6.75 + 6 = 0 3( x 1) 2 + 3( y 1.5) 2 = 3.75 ( x 1) 2 + ( y 1.5) 2 = 1.25

Centre = (1, 1.5) and radius = 1.25 or

5/ 4 = 5 / 2

Question 13. For each of the following State (a) the vertices (b) the value of e (c)the foci (d) the length of the major axis (e) the length of the minor axis for each of the following ellipses. x2 y2 (i) + =1 49 36 ( x 0) 2 ( y 0) 2 + = 1 72 62 49 > 36 Therefore a Horizontal Ellipse i.e Major axis is horizontal and Minor axis is vertical

= 7 = 6 a & b

Centre: (0,0) Vertices: (7, 0) , (-7, 0) and (0, 6) and (0, -6) Length of major axis = 2 a = 2 7 = 14 Length of minor axis = 2b = 2 6 = 12 b2 36 Eccentricity e = 1 2 = 1 =0.515 a 49

Foci: (always lie on the major axis) (0 ae, 0) =(0 7 0.515) =(3.605, 0)

Minor axis = 12

Major axis = 14

(ii)

( x + 3) 2 ( y 2) 2 + =1 25 4

( x 3) 2 ( y 2) 2 + = 1 52 22 25 > 4 Horizontal Ellipse i.e Major axis is horizontal and Minor axis is vertical

a = 5 and b = 2 Major axis length = 10 Minor axis length = 4 Centre: (-3, 2)

Vertices: (-3 + 5, 2)= (2, 2) (-3 -5, 2)= (-8, 2) (-3, 2+2) = (-3, 4) (-3, 2-2) = (-3, 0)

e = 1

4 =0.917 25

Foci (Again Horizontal ellipse, so foci lie on the Major axis) (3 ae, 2) = (3 5 0.917, 2) = (1.58, 2) and (7.58, 2)

Minor axis = 10

Major axis = 10 Answers Q1 a 78 weeks, 8.96% b compound = 11.89 % simple = 11.75 % compound investment better. c 5485.67 + 3735.94 + 4059.61 = 13281.22 Q2 a Term 4 = 80 Sum = 2550 b sum = 4.4631 Q3 a 7.360087 7.735278 b 23 890.46 c 1 738.28 per month d 94 237.21 Q4 a 13.1808 18.42 b $39389.33 c $423504.48 d. $176.75 Q5 (i) domain reals except x=2, range real numbers (ii) reals except x=1:range y cannot be between 1 and 4(iii)x not between -3 and-4 :rangey0 Q6(i) yes (ii) no (iii) yes (iv) no (v) no (vi)no (vii)yes Q7(a)y= ( x 4)1 / 2 +2, no some x values

3

(c)

y= ( x + 11 / 4)1 / 2

3

+1.5

Q8(i) reals except x=-2,(ii) range.. reals except y=3 (iii) x=-2 and y=3 Check sketch on calculator. Q9. (4,3) Check sketch on calculator ..show x intercept of 6.25 Q10.check calculator for f(x).vertical asymptote moved 1 unit to right, ie at x =1 horizontal asymptote now at y=4 so up 4 units. Check calculator for sketch. Q11(a) (x+2) +(y-5)=9 (b) (x-4) +(y-5)=6 Q12(a) centre(1,-2) r=14 (b) Centre(1,1.5) r=5/2 Q13(i) vertices at (7,0) and (0,6) e=13/7 , foci (13,0), major axis is 14 units long and minor axis is 12 units long (ii) vertices at (-8, 2),(2, 2) and(-3,0) (-3,4), e=(21/25),foci at (-7.58, 2) and(1.58, 2) major axis is 10 units and minor axis is 4 units long

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