In this question give all answers correct to two decimal places.

Diogo deposited $8000$ Argentine pesos, ${\text{ARS}}$, in a bank account which pays a nominal annual interest rate of $15\%$, compounded monthly.

Find how much interest Diogo has earned after $2$ years.

Carmen also deposited ${\text{ARS}}$ in a bank account. Her account pays a nominal annual interest rate of $17\%$, compounded yearly. After three years, the total amount in Carmen’s account is ${\text{10}}\,{\text{000}}\,{\text{ARS}}$.

Find the amount that Carmen deposited in the bank account.

The first time an answer is not given to two decimal places the final (A1) is not awarded.

$FV = 8000 \times {\left( {1 + \frac{{15}}{{100 \times 12}}} \right)^{2 \times 12}}\,\,\,\left( {FV = 8000 \times {{(1.0125)}^{2 \times 12}}} \right)$       (M1)(A1)

OR

$I = 8000 \times {\left( {1 + \frac{{15}}{{100 \times 12}}} \right)^{2 \times 12}} - 8000$       (M1)(A1)

Note: Award (M1) for substitution into compound interest formula, (A1) for correct substitutions.

OR

$N = 24$

$I\%  = 15$

$PV =  - 8000$

$PMT = 0$

$(FV = 10778.8084)$

$P/Y = 12$

$C/Y = 12$            (A1)(M1)

Note: Award (A1) for $C/Y = 12$ seen, (M1) for all other correct entries. $FV = 10778.8084$ need not be seen.

OR

$N = 2$

$I\%  = 15$

$PV =  - 8000$

$PMT = 0$

$(FV = 10778.8084)$

$P/Y = 1$

$C/Y = 12$            (A1)(M1)

Note: Award (A1) for $C/Y = 12$ seen, (M1) for all other correct entries. $FV = 10778.8084$ need not be seen.

interest $= 2778.81$            (A1)    (C3)

Note: Final answer must be to two decimal places for the (A1) to be awarded.

 

$N = 3$

$I\%  = 17$

$(PV =  \pm 6243.705564)$

$PMT = 0$

$(FV =  \mp 10\,000)$

$P/Y = 1$

$C/Y = 1$          (A1)(M1)

Note: Award (A1) for $FV =  \mp 10\,000$, (M1) for all other correct entries. $PV =  \pm 6243.705564$ need not be seen.

OR

$10\,000 = PV \times {\left( {1 + \frac{{17}}{{100}}} \right)^3}$          (M1)(A1)

Note: Award (M1) for substituting into compound interest formula, (A1) for equating $10\,000$ to the correctly substituted compounded interest formula.

$(PV = )\,\,6243.71$                 (A1)         (C3)

Note: Answer must be to two decimal places.

Question 12: Compound Interest
The use of the TVM solver, with lack of working, remains a source of concern, though many more are writing down the calculator display; candidates are advised still to write down substituted formulas prior to using the TVM solver. Compounding periods remain a source of confusion
The use of the 0.15 and 0.17 was a common error, as was the computation of the amount in part (a).

Question 12: Compound Interest
The use of the TVM solver, with lack of working, remains a source of concern, though many more are writing down the calculator display; candidates are advised still to write down substituted formulas prior to using the TVM solver. Compounding periods remain a source of confusion
The use of the 0.15 and 0.17 was a common error, as was the computation of the amount in part (a).