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Date	November 2020	Marks available	3	Reference code	20N.1.SL.TZ0.T_8
Level	Standard Level	Paper	Paper 1	Time zone	Time zone 0
Command term	Calculate	Question number	T_8	Adapted from	N/A

Question

Give your answers in this question correct to the nearest whole number.

Imon invested $25 000$ Singapore dollars ( $SGD$ ) in a fixed deposit account with a nominal annual interest rate of $3.6 %$ , compounded monthly.

Calculate the value of Imon’s investment after $5$ years.

[3]

At the end of the $5$ years, Imon withdrew $x SGD$ from the fixed deposit account and reinvested this into a super-savings account with a nominal annual interest rate of $5.7 %$ , compounded half-yearly.

The value of the super-savings account increased to $20 000 SGD$ after $18$ months.

Find the value of $x$ .

[3]

Markscheme

* This question is from an exam for a previous syllabus, and may contain minor differences in marking or structure.

$(F V =) 25 000 \times {(1 + \frac{3.6}{100 \times 12})}^{12 \times 5}$ (M1)(A1)

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

OR

$N = 5$
$I % = 3.6$
$P V = \mp 25 000$
$P / Y = 1$
$C / Y = 12$ (A1)(M1)

Note: Award (A1) for $C / Y = 12$ seen, (M1) for all other correct entries.

OR

$N = 60$
$I % = 3.6$
$P V = \mp 25 000$
$P / Y = 12$
$C / Y = 12$ (A1)(M1)

Note: Award (A1) for $C / Y = 12$ seen, (M1) for all other correct entries.

$(F V =) 29 922 (SGD)$ (A1) (C3)

Note: Do not award the final (A1) if answer is not given correct to the nearest integer.

[3 marks]

$20 000 = P V \times {(1 + \frac{5.7}{100 \times 2})}^{2 \times 1.5}$ (M1)(A1)

Note: Award (M1) for substituted compound interest equated to $20 000$ . Award (A1) for correct substitutions.

OR

$N = 1.5$
$I % = 5.7$
$F V = \pm 20 000$
$P / Y = 1$
$C / Y = 2$ (A1)(M1)

Note: Award (A1) for $C / Y = 2$ seen, (M1) for all other correct entries.

OR

$N = 3$
$I % = 5.7$
$F V = \pm 20 000$
$P / Y = 2$
$C / Y = 2$ (A1)(M1)

Note: Award (A1) for $C / Y = 2$ seen, (M1) for all other correct entries.

$(x =) 18 383 (SGD)$ (A1) (C3)

Note: Do not award the final (A1) if answer is not given correct to the nearest integer (unless already penalized in part(a)).

[3 marks]

Examiners report

[N/A]

Syllabus sections

Topic 1—Number and algebra » SL 1.4—Financial apps – compound interest, annual depreciation

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