STOCK EXCHANGE AND SHARES

Q.1. A man purchased 300 shares of the face value of Rs. 100 each from the market at Rs. 800
per share. If a dividend of 24% is declared, find his earning percent on the investment

Q.2. How many shares of market value Rs. 25 can be purchased for Rs. 15,775

Q.3. A man invested Rs. 45000 when he bought Rs. 100 shares at Rs. 150. If 20% dividend is
declared, find his annual income.

Q.4. A 4% stock yields 5%. The market value of the stock of face value Rs. 100 is

Q.5. If annual income from 6% stock at 80 is Rs. 50 more than 7% stock at 120, then the
investment is

Q.6. A corporation declares an annual dividend of 5%. Arun owns 500 shares (par value Rs. 80).
How much dividend will he receive?

Q.7. The capital stock of a company is Rs. 500,000 and is divided into 5,000 shares of common
stock. If the company pays a dividend of Rs. 64,000, what amount will Dinesh receive for his 50
shares?

Q8. To produce an annual income of Rs. 1200 from a 12% stock at 90, the amount of stock
required is:

Q9. A 9% stock yields 8%. The market value of the stock is:

AMORTIZATION
You want to take out a $340,000 mortgage (home loan). The interest rate on the loan
is 3.5%, and the loan is for 30 years. How much will your monthly payments be? How
much interest will you pay over the life of the loan?
 Find the monthly payment for a car costing $15,000 if the loan is amortized over five
years at an interest rate of 9%.

Jack goes to a car dealer to buy a new car for $18,000 at 2% APR with a five-year loan.
The dealer quotes him a monthly payment of $425. Verify that this is the correct
monthly payment.

Janine bought $3,000 of new furniture on credit. Because her credit score isn’t very
good, the store is charging her a fairly high interest rate on the loan: 16%. If she
agreed to pay off the furniture over 2 years, how much will she have to pay each
month? What is the total interest charged?

PRESENT VALUE OFAN

ANNUINITY
Rodriguez is planning on having an annual gross income of $50,000 at the end of every
year when he retires at age 65. He is planning for the account to be emptied by age 78,
which is the average life expectancy for a Canadian man. If the account earns 5.1%
compounded annually, what amount of funds needs to be in the account when he
retires

1. Rodriguez wants to leave a $100,000 inheritance for his children (assuming he dies at
age 78).
2. Payments are at the beginning of the year.
3. His interest rate is 5.1% compounded semi-annually

4. Two years ago, Jillian purchased a new Ford F-250 for $71,482.08 with a $5,000
down payment and the remainder financed through her Ford dealership at 5.9%
compounded monthly. She has been making monthly payments of $1,282.20.
What is her balance owing today? How much interest has she paid to date?

Continuing with Jillian’s Ford F-250 purchase, recall that Jillian’s monthly payments are
fixed at $1,282.20 for five years. Assume that after two years Ford wants to sell the
contract to another finance company, which agrees to a discount rate of 10.8%
compounded semi-annually. Jillian’s final payment is known at $1,282.49. What are the
proceeds of the sale?

Mrs Bosman has won R75 000 in a competition. She decides to invest it
in a retirement annuity, which will pay her a regular income quarterly, in
advance, at 12% p.a. compounded quarterly for 10 years. She will
receive her first income cheque the moment she pays her winnings of
R75 000 to the Investment Company. How much will Mrs Bosman
receive quarterly in advance for the next 10 years?

FUTURE VALUE OFAN ANNUINITY

A father decides to invest R650 at the end of each month for five years
at 9% p.a. compounded monthly to pay for his son’s tertiary education in
five years’ time. What amount of money will be available at the end of
five years?

Sam Gumede plans to buy a new car in two years’ time, which he
estimates will cost him R140 000. He also estimates that the trade-in
value on his current car will be R36 500 in two years’ time. How much
must Sam save monthly in a special savings account with his bank that
will pay 6.5% p.a. compounded monthly to buy the new car in
two years’ time?

At the end of each year an investor makes six equal deposits of R500
into an investment account with the Cape City Bank, which pays 12%
p.a. compounded annually.
A father decides to invest R650 at the beginning of each month for five years at 9%
p.a. compounded monthly to pay for his son’s tertiary education in five years’ time.
What amount of money will be available at the end of five years?

COMPOUND INTEREST
(a)
A man needs to borrow Rs.30,000 for two years. Which of the following loans is
moreadvantageous to him?

I)4.1 % simple interest or

ii)4% per annum compounded semi-annually?

(b)A man borrowed Rs 5,000 at 6% simple interest and invested the same amount at 6%
1compounded semi annually. What would he gain after 8.5years?

(a)The price of a commodity is expected to increase by 15% the next week. If the
increase brings the price to Rs. 7,280, what would be the price of commodity this
week?

(b)What annual rate of interest compounded quarterly should one obtain in order to doublethe
investment in five years?

(c)A person invests Rs 25,000 in a saving account paying 12% interest

compoundedsemiannually. After 3 years he withdraws Rs 20,000 from the account and invests
in acertificate of deposit paying 12% interest compounded monthly, leaving the remainder inthe
saving account. How much is his total compound amount two years after the purchaseof
Certificate of deposits?
(d) i)How long will it take for Rs 1,500 invested at 7% simple interest to triple inAmount?

ii)The difference between simple Interest and compound interest on a certain sum for 5years @
10% p.a. is Rs 44,204. Find the compound interest on the sum for 3 years?
(a)If Rs. 30,000 amount to Rs. 76210.55 in 8 years compounded semi-annually. What is
theinterest rate?

(b)
i)At what rate of interest compounded semi-annually will Rs 6000 amount to Rs9,630 in 8
years?

ii)To clear up a debt, a person agrees to pay Rs 1000 now, another Rs 1000 a yearfrom now
and 'another Rs 1000 in two years. If the future payments are discountedat 8% compounded
quarterly, what is the present value of these three payments?]

(a)For how many years Mr. Malik should keep Rs. 40,000 invested so as to accumulate tothe
amount of Rs. 60,000 at 10% compounded semi-annually?

(b)Find the effective rate of interest equivalent to nominal rate of interest 8% compounded
quarterly?

INTEREST COMPONDED
CONTINOUSLY
If $17,000 is invested at a rate of 6.25% per year for 39 years, find value
of the investment to the nearest penny if the interest is compounded
continuously.

If $20,000 is invested at a rate of 6.5% per year compounded

continuously, find value of the investment at each given time and round
to the nearest cent
A recent college graduate decides to open a credit card in order to pay
for their upcoming trip across Europe. In order to get a card with a
large enough credit limit to pay for their trip ($5,500), the student
agrees to an interest rate of 38.99% compounded continuously. If no
payments are made for an entire year, what will be the balance on the
card

Parents of a newborn baby are given a gift of $20,000 and will choose
between two options to invest for their child’s college fund. Option 1 is
to invest the gift in a fund that pays an average annual interest rate of
8% compounded semiannually; option 2 is to invest the gift in a fund
that pays an average annual interest rate of 7.75% compounded
continuously. Assuming each investment has a term of 18 years,
calculate the value of each investment and round your answer to the
nearest penny.

WEBSITES/ANSWERS TO QUESTIONS:
https://www.hitbullseye.com/Stocks-and-Shares.php
https://www.hitbullseye.com/Stocks-and-Shares-Questions.php
https://ecampusontario.pressbooks.pub/businessmathtextbook/chapter/11-3-
present-value-of-annuities/
https://math.libretexts.org/Courses/Las_Positas_College/Math_for_Liberal_Arts/
08%3A_Consumer_Mathematics/8.05%3A_Amortized_Loans
uta.co.za

https://www.scribd.com/document/440391627/Simple-Compound-Interest-
With-Solutions
(web.ics.purdue.ed
AUTHOR: joemane

NOTE;: THESE QUESTIONS ARE ONLY FEW