| Date | May Example question | Marks available | 2 | Reference code | EXM.2.SL.TZ0.1 |
| Level | Standard Level | Paper | Paper 2 | Time zone | Time zone 0 |
| Command term | Calculate | Question number | 1 | Adapted from | N/A |
Question
Paul wants to buy a car. He needs to take out a loan for $7000. The car salesman offers him a loan with an interest rate of 8%, compounded annually. Paul considers two options to repay the loan.
Option 1: Pay $200 each month, until the loan is fully repaid
Option 2: Make 24 equal monthly payments.
Use option 1 to calculate
Use option 2 to calculate
Give a reason why Paul might choose
the number of months it will take for Paul to repay the loan.
the total amount that Paul has to pay.
the amount Paul pays each month.
the total amount that Paul has to pay.
option 1.
option 2.
Markscheme
evidence of using Finance solver on GDC M1
A1
It will take 40 months A1
[3 marks]
M1A1
[2 marks]
Monthly payment = $316 ($315.70) M1A1
[2 marks]
M1A1
[2 marks]
The monthly repayment is lower, he might not be able to afford $316 per month. R1
[1 mark]
the total amount to repay is lower. R1
[1 mark]
