Year 12 Maths Advanced Module 7 ~45 min Module Quiz

Module Quiz, Financial Mathematics

Final test of your Module 7 knowledge. 16 replayable questions across the Financial Mathematics module. Aim for 90%+.

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Q11 MARK

If $5000 is invested at 6% p.a. compound interest for 3 years, which expression gives the future value?

A$5000(0.06)^{3}$ B$5000(1.06)^{3}$ C$5000 + 3(1.06)$ D$5000(1.6)^{3}$

Q21 MARK

The effective annual rate equivalent to 3% per half-year is

A$6.09\%$ B$3\%$ C$6\%$ D$9\%$

Q31 MARK

A car depreciates by 12% each year. After $n$ years, its value is best modelled by

A$V = V_0(1.12)^{n}$ B$V = V_0 - 12n$ C$V = V_0(0.88)^{n}$ D$V = V_0(12)^{n}$

Q41 MARK

For an ordinary annuity, payments are made

Aat the beginning of each period Bonly once Ccontinuously Dat the end of each period

Q51 MARK

In the recurrence $A_n = 1.004A_{n-1} + 250$, the value $250$ represents

Aa regular deposit Bthe monthly interest rate Cthe initial balance Dthe annual fee

Q61 MARK

For a loan recurrence $L_n = 1.005L_{n-1} - 800$, the term $-800$ represents

Ainterest charged Bthe number of months Cthe principal borrowed Da repayment

Q71 MARK

Which change will reduce the total interest paid on a loan, all else equal?

AMaking repayments less often BIncreasing the interest rate CMaking extra repayments DIncreasing the loan term only

Q81 MARK

The present value of a future payment is

Aalways larger than the future payment Bthe amount today equivalent to that future payment Cunrelated to interest rates Dthe same as simple interest

Q91 MARK

If interest is compounded monthly at 6% p.a., the monthly rate used in calculations is

A$0.5\%$ B$6\%$ C$12\%$ D$72\%$

Q101 MARK

An annuity due differs from an ordinary annuity because payments are made

Anever Bonly at the end of the final period Cat the beginning of each period Dat random times

Q111 MARK

When comparing investment products, which pair is most important to compare on the same basis?

AAccount names and colours BOnly the first month's return CThe bank branch location only DFees and effective returns

Q121 MARK

A redraw facility usually allows a borrower to

Aavoid all interest forever Bwithdraw extra repayments already made Cskip repayments permanently Dincrease the quoted interest rate

Q131 MARK

If a budget model has income minus expenses equal to a positive amount each month, that amount is

Amonthly surplus Bcompound interest Cdepreciation Dprincipal outstanding

Q141 MARK

For compound interest, increasing the compounding frequency while keeping the nominal annual rate fixed generally

Ahas no effect Bmakes the rate negative Cincreases the effective annual rate Dremoves interest

Q151 MARK

A spreadsheet fill-down is useful in financial recurrence problems because it

Aproves all formulas symbolically Bremoves the need for units Cchanges percentages into dollars automatically Diterates the same update rule period by period

Comprehensive Answers

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Quiz Answers

Q1. B, $A = P(1+r)^n$

Q2. A, $r_{eff} = (1.03)^2 - 1 = 6.09\%$

Q3. C, Value is multiplied by $0.88$ each year

Q4. D, Ordinary annuity: payments at the end of each period

Q5. A, $250$ is the regular deposit added each period

Q6. D, $800$ is the repayment subtracted each period

Q7. C, Extra repayments reduce the balance sooner

Q8. B, PV is the amount today equivalent to the future payment

Q9. A, $6\% \div 12 = 0.5\%$

Q10. C, Annuity due: payments at the beginning of each period

Q11. D, Compare fees and effective returns

Q12. B, Redraw lets you withdraw extra repayments

Q13. A, Income minus expenses > 0 is a surplus

Q14. C, More frequent compounding increases the effective rate

Q15. D, Fill-down iterates the same recurrence each period

Q16. D, =NPER

Q17. B, 0% hides interest in price

Q18. A, Early extras save most

Q19. C, Consistent units needed

Q20. D, All essential

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Tick when you've finished all questions and reviewed your answers.

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