University of Cape Town

Department of Mathematics and Applied Mathematics

MAM1010/1110F Class Test 1 Make up

6 April 2022
Time: 75 minutes

• Answer the questions in the spaces provided on the question sheets. If you run
out of room for an answer, continue on the back of the page and clearly indicate
that you have continued the problem elsewhere.

• Show all your work or reasoning. Answers without work or reasoning shown
will receive no mark.

• You may use (non-graphing) calculators. Round your answers off to two decimal
places where necessary, unless otherwise specified.

• There are 8 pages of questions excluding this one. Make sure that no pages are
missing. Put your student number at the top of each page, just in case a page
comes loose.

Surname: First Name:

Student Number: Signature:

Do not write below this line:

Question: 1 2 3 4 5 6 7 8 9 10 Total
Points: 4 8 3 5 5 5 2 4 3 11 50
Score:
MAM1010/1110F Class Test 1 Page 1 of 8 Student Number:

1. (a) [2 Marks] Convert an effective interest rate of 6, 5% to a nominal interest rate

compounded quarterly.

Solution:
rnom 4
(1 + ) = 1 + ref f
4
1
⇒ rnom = 4[(1 + 0, 065) 4 − 1]
⇒ rnom = 6, 35%

(b) [2 Marks] R5000 is invested at 3,4% p.a. simple interest How much is it worth
after 7 months?

Solution:
FV = P V (1 + rt)
7
= 5 000(1 + 0, 034 )
12
= R 5 099, 17
MAM1010/1110F Class Test 1 Page 2 of 8 Student Number:

2. Dana takes out a loan of R1 200 000 from a bank to buy a flat. She can afford to pay
back R11 000 at the end of every month. The bank charges interest of 9,75% p.a.,
compounded monthly.
(a) [3 Marks] How many months does Dana take to repay the loan to the bank?

Solution:
r −mt
[1 − (1 + m
) ]
PV = P MT r
m
1 200 000· 0,0975
h i
ln 1 − 11 000
12

⇒t = − 0,0975
ln(1 + 12 )
⇒ t = 269 months

(b) [3 Marks] How much is the last payment (the one that is less than R11 000)?

Solution:
First calculate the balance outstanding (B.O) at 268 months:
B.O. = F VR 1 200 000 − F V268 monthly payments
268
(1 + 0,0975
 
)268 − 1

0, 0975 12
= 1 200 000 1 + − 11 000 0,0975
12 12
= 8166, 296376

The final payment is the B.O. after a month accruing interest:

 
0, 0975
PMT = B.O. 1 +
12
= R 8232, 65
MAM1010/1110F Class Test 1 Page 3 of 8 Student Number:

(c) [2 Marks] How much of the last payment is interest?

Solution:
0, 0975
INT = B.O. ×
12
= R 66, 35

3. [3 Marks] During a prolonged recession, property values in Betty’s Bay are depreci-
ating by 1% every two months. If a house costs R5 000 000 today, how much will it
be worth in 3 years time?

Solution:

FV = PV (1 − 0, 01)6×3
= 5 000 000 × 0, 9918
= R 4 172 568, 81
MAM1010/1110F Class Test 1 Page 4 of 8 Student Number:

4. [5 Marks] Your savings account guarantees you a return of 3% per year, compounded
monthly. If you work for 40 years before retiring, how much must you deposit each
month that you work so that you can retire with a pension of R35000 per month for
20 years?

Solution:
First work out the PV of the annuity you will draw your pension from:
h i
0,03 −12×20


1− 1+ 12
PVannuity = 35 000 × 0,03
12
= 6 310 882, 00

This is the FV of the sinking fund you will pay into while you’re working:
0,03
12
PMT = FVsinking × h i
0,03 12×40


1+ 12
−1
= R 6 814, 77
MAM1010/1110F Class Test 1 Page 5 of 8 Student Number:

5. [5 Marks] A loan of R13 000 is to be repaid over 5 years as follows: Rx after one year,
R2x two years later, and R6 000 at the end of the 5th year. The effective interest
rate is 7% p.a. for the duration of the loan. Determine x.

Solution:

13 000 x 2x 6 000
t=0 1 2 3 4 5 years

Taking all amounts back to t = 0:

13 000 = x(1 + 0, 07)−1 + 2x(1 + 0, 07)−3 + 6 000(1, 07)−5

13 000 − 6 000(1 + 0, 07)−5
⇒x =
1, 07−1 + 2(1, 07)
= R 3 397, 54

OR

Bringing all amounts forward to t = 5 years:

0 = 13 000(1 + 0, 07)5 − x(1 + 0, 07)4 − 2x(1 + 0, 07)2 − 6 000

13 000(1, 07)5 − 6 000
⇒x =
1, 074 + 2(1, 07)2
= R 3 397, 54
MAM1010/1110F Class Test 1 Page 6 of 8 Student Number:

6. Ami is paying back a R5000 loan over 2 years, with payments made at the end of
each month. The interest rate is 5%p.a. compounded monthly.
(a) [2 Marks] How much are her monthly payments?

Solution:
0,05
12
PMT = 5 000 ×
−12×2
1− 1 + 0,05
12
= R 219, 36

(b) [3 Marks] Ami misses her payment at the end of the third month. How much
should she add to her monthly payment at the end of the fourth month to
compensate for the missed payment?

Solution:
She should add one monthly payment with the interest it would accrue over
one month:  
0, 05
Additional PMT = 219, 36 1 +
12
= R 220, 27
MAM1010/1110F Class Test 1 Page 7 of 8 Student Number:

7. [2 Marks] How long will it take an investment to triple in value, if it is invested at

3,2%p.a. compounded continuously?

Solution:

3PV = PVe0,032 t
⇒ ln 3 = 0, 032 t
ln 3
⇒t =
0, 032
t = 34, 33 years

8. Identify the following functions as odd, even or neither:

(a) [2 Marks] f (x) = |x3 |

Solution:
Check if even:
f (−x) = |(−x)3 |
= | − (x)3 |
= |x3 |
= f (x)

So f (x) is even.
√
(b) [2 Marks] g(x) = x2 + 2

Solution:
Check if even:
p
g(−x) = (−x)2 + 2
√
= x2 + 2
= g(x)

So g(x) is even.
MAM1010/1110F Class Test 1 Page 8 of 8 Student Number:

9. [3 Marks] Simplify to a single logarithm: logb 6 + logb b2 − logb 3

Solution:

6b2
 
2
logb 6 + logb b − logb 3 = logb
3
2
= logb 2b

10. Let y = f (x) be the piecewise-defined function given by the following graph:

y
new y axis
2

1
x
-4 -3 -2 -1 0 2 3
new x axis
-1

(a) [2 Marks] Write down the domain of f .

Solution:
x ∈ [−4, −3] ∪ [−2, 3) OR − 4 ≤ x ≤ −3 ∪ −2 ≤ x < 3

(b) [5 Marks] Write down the equation describing f , given that for −2 ≤ x ≤ 0 f
is described by a parabola.

Solution:
The roots of the quadratic are x = 0 and x = −2, so the quadratic must be
x(x + 2) = x2 + 2x.



1 −4 ≤ x ≤ −3
x2 + 2x

−2 ≤ x ≤ 0
f (x) =


x 0<x≤2

2 2<x<3

or any correct variant of < and ≤.

(c) [4 Marks] On the same diagram, show the new shifted axes for the graph of y = 1 + f (x − 1).