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Date May 2018 Marks available 2 Reference code 18M.1.SL.TZ2.T_5
Level Standard Level Paper Paper 1 Time zone Time zone 2
Command term Calculate Question number T_5 Adapted from N/A

Question

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

Karl invests 1000 US dollars (USD) in an account that pays a nominal annual interest of 3.5%, compounded quarterly. He leaves the money in the account for 5 years.

Calculate the amount of money he has in the account after 5 years.

[3]
a.i.

Write down the amount of interest he earned after 5 years.

[1]
a.ii.

Karl decides to donate this interest to a charity in France. The charity receives 170 euros (EUR). The exchange rate is 1 USD = t EUR.

Calculate the value of t.

[2]
b.

Markscheme

1000 ( 1 + 3.5 4 × 100 ) 4 × 5      (M1)(A1)

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

OR

N = 5

I = 3.5

PV = 1000

P/Y = 1

C/Y = 4

Note: Award (A1) for C/Y = 4 seen, (M1) for other correct entries.

OR

N = 5 × 4

I = 3.5

PV = 1000

P/Y = 1

C/Y = 4

Note: Award (A1) for C/Y = 4 seen, (M1) for other correct entries.

= 1190.34 (USD)     (A1)

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

[3 marks]

a.i.

190.34 (USD)      (A1)(ft) (C4)

Note: Award (A1)(ft) for subtraction of 1000 from their part (a)(i). Follow through from (a)(i).

[1 mark]

a.ii.

170 190.34      (M1)

Note: Award (M1) for division of 170 by their part (a)(ii).

= 0.89     (A1)(ft) (C2)

Note: Follow through from their part (a)(ii).

[2 marks]

b.

Examiners report

[N/A]
a.i.
[N/A]
a.ii.
[N/A]
b.

Syllabus sections

Topic 2—Functions » SL 2.1—Equations of straight lines, parallel and perpendicular
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Topic 2—Functions
Prior learning

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