Lessons 15–19 cover investment comparison, consumer finance, savings goals, technology, and module synthesis. This final checkpoint tests your ability to integrate knowledge across the entire module. Aim for 85%+ before attempting the Module Quiz.
8 multiple-choice questions, graded for your checkpoint score with immediate feedback. Then complete 3 written responses; these are saved for you to self-review against model answers and are not included in the MC score.
Suggested time: 35 minutes. Show formula substitutions in written responses. Keep full precision through calculations and round currency once, at the end, to the nearest cent unless a prompt says otherwise. State whether payments occur at period start or end.
Write your working, then open the matching model answer to self-check.
Compare AUD 30,000 invested for 15 years at 4.5% p.a. and at 5.8% p.a., both compounded annually. Find both final values and the difference.
A loan of AUD 20,000 is repaid over 24 months at 20% p.a. nominal compounded monthly. Find the monthly repayment and total interest using the unrounded formula payment.
A loan of AUD 450,000 is repaid monthly over 25 years at 4.8% p.a. nominal compounded monthly. Use PMT or the formula to find the repayment to cents and total interest using the unrounded payment. Explain what extending the term does to payment size and total interest, all else equal.
Question: A managed fund earns 7% gross and charges 1.2% annually under a simplified additive-fee model. What net rate is used in this model? Key: A. Net rate=7%−1.2%=5.8% under the stated simplified model.
Question: AUD 40,000 is invested for 10 years at 4.5% p.a. or at 5.8% p.a., annually compounded. What is the difference in final values, to the nearest cent? Key: B. Difference=40,000[(1.058)^10−(1.045)^10]=AUD 8,174.97.
Question: A retailer offers the same item at a higher financed price with “0% interest”. What should be checked when comparing it with the cash option? Key: C. The financed purchase can still cost more through a higher price or fees. Compare the complete stated payment total with the cash price.
Question: Which spreadsheet function can calculate a fixed monthly loan repayment? Key: D. PMT(rate,nper,pv) computes a level periodic payment; sign conventions may display the payment as negative.
Question: A credit-card balance is AUD 5,000 at 19.99% p.a. nominal, compounded monthly, with no further purchases or fees. What is the monthly periodic rate? Key: B. Divide by 12: 19.99%/12≈1.6658% per month.
Question: You want AUD 50,000 after 60 end-of-month deposits. The monthly rate is 0.4%. What payment is required, to the nearest cent? Key: C. Solve 50,000=a[(1.004)^60−1]/0.004, so a=AUD 738.99 per month.
Question: What is the best role for a spreadsheet in a written financial-mathematics solution? Key: D. Technology can check arithmetic, but a clear solution still states the model, substituted values, timing assumptions and interpretation.
Question: In the simplified loan model, an offset balance affects interest by: Key: A. The offset reduces the net balance used to calculate interest; the contractual rate and scheduled repayment are not automatically changed.
At 4.5%: $30{,}000(1.045)^{15}=\$58{,}058.47$. At 5.8%: $30{,}000(1.058)^{15}=\$69{,}888.59$. The difference from unrounded values is $\$11{,}830.12$.
$r=0.20/12$, $n=24$. $M=\frac{20{,}000r}{1-(1+r)^{-24}}=\$1{,}017.92$ per month. Using unrounded $M$, the interest is $24M-20{,}000=\$4{,}429.99$.
$r=0.048/12$, $n=300$. $M=\frac{450{,}000r}{1-(1+r)^{-300}}=\$2{,}578.49$ per month. Using unrounded $M$, total interest is $300M-450{,}000=\$323{,}545.90$. A longer term lowers the periodic payment but raises total interest, all else equal.
Tick when you have finished all questions and reviewed your answers.