Questions

STANDARD 2
Financial Maths (Std 2), F4 Investments and Loans (Y12) 1. Financial Maths, STD2 F4 2009 HSC 6 MC
Compound Interest and Shares (Std2) A house was purchased in 1984 for $35 000. Assume that the value of the house has increased by 3% per
annum since then.
Teacher: Jenny Taylor
Exam Equivalent Time: 78 minutes (based on allocation of 1.5 minutes per mark) Which expression gives the value of the house in 2009?
A.

B.
C.
D.

2. Financial Maths, STD2 F4 2022 HSC 10 MC

Alex purchased 800 shares. The total cost was $2.60 per share. Alex sold the shares one year later for
$3.40 each and paid a fee of $24.95 for selling the shares.
What profit did Alex make on these shares?
A. $590.10
B. $615.05
IMPORTANT FEATURES AND TIPS FROM EXAM HISTORY
C. $640.00
MS-F4 Investments and Loans has contributed a substantial 8.6% to the new syllabus Std2 exams since
D. $664.95
its introduction in 2019.
We have split this area into 3 sub-topics for analysis purposes: Compound Interest and Shares (4.8%),
Depreciation - Declining Balance (2.0%) and Loans and Credit Cards (1.8%). 3. Financial Maths, STD2 F4 2015 HSC 17 MC
This analysis looks at the largest sub-topic Compound Interest and Shares (4.8%). What amount must be invested now at 4% per annum, compounded quarterly, so that in five years it will
have grown to $60 000?
ANALYSIS - What to Expect and Common pitfalls A. $8919
Compound Interest consistently causes problems, particularly with questions involving Compounded B. $11 156
Value of $1 tables which have been asked 5 times since 2011 (notably absent in new syllabus exams to
C. $49 173
date), producing sub-50% mean marks on 4 occasions.
D. $49 316
Examiners have required students to use the formula 7 times in the last 9 years
(including 2021-22) with allocations of between 1-3 marks. A regularly tested topic that requires attention.
2021 Std2 Q26b required a novel comparison between compound and simple interest that caused
problems for a majority of students and should be carefully reviewed.
Dividend Yield continues to grow in importance with the 2022 HSC exam allocating a dedicated question
to this topic for the 4th year in a row. Although well answered in 2022, this has historically not been the
case. We expect this topic area to be consistently examined going forward and highly recommend a
revision focus.
4. Financial Maths, STD2 F4 2016 HSC 8 MC 6. Financial Maths, STD2 F4 2019 HSC 13 MC
The table shows the future value of an investment of $1000, compounding yearly, at varying interest rates The graph show the future values over time of , invested at three different rates of compound interest.
for different periods of time.

Based on the information provided, what is the future value of an investment of $2500 over 3 years at 4%
pa?
(A) $1124.86
(B) $2812.15
(C) $3624.86
(D) $5312.15

5. Financial Maths, STD2 F4 2017 HSC 10 MC

A single amount of $10 000 is invested for 4 years, earning interest at the rate of 3% per annum, Which of the following correctly identifies each graph?
compounded monthly.
A. B.
Which expression will give the future value of the investment?
A.
B.

C.

D. C. D.
7. Financial Maths, STD2 F4 2019 HSC 3 MC 10. Financial Maths, STD2 F4 2022 HSC 11 MC
Chris opens a bank account and deposits $1000 into it. Interest is paid at 3.5% per annum, compounding In ten years, the future value of an investment will be $150 000. The interest rate is 4% per annum,
annually. compounded half-yearly.
Assuming no further deposits or withdrawals are made, what will be the balance in the account at the end Which equation will give the present value of the investment?
of two years?
A.
A. $1070.00
B. $1071.23
B.
C. $1822.50
D. $2070.00 C.

8. Financial Maths, STD2 F4 2020 HSC 4 MC D.

Joan invests $200. She earns interest at 3% per annum, compounded monthly.
What is the future value of Joan's investment after 1.5 years? 11. Financial Maths, STD2 F4 2023 HSC 10 MC
A. $209.07
An amount of $25 000 is invested for six years. Interest is earned at a rate of 8% per annum, compounding
B. $209.19 quarterly.
C. $279.51 Which expression gives the value of the investment after 6 years, in dollars?
D. $311.93 A.
B.
9. Financial Maths, STD2 F2 2021 HSC 5 MC C.
Peter currently earns $21.50 per hour. His hourly wage will increase by 2.1% compounded each year for D.
the next four years.
What will his hourly wage be after four years?
A.
B.
C.
D.
12. Financial Maths, STD2 F4 2012 HSC 9 MC 14. Financial Maths, STD2 F4 2018 HSC 19 MC
Tracy invests some money for 2 years at 4% per annum, compounded quarterly. The table shows the compounded values of $1 at different interest rates over different periods.

Which figure from the table should Tracy use to calculate the value of her investment at the end of 2 Amy hopes to have $21 000 in 2 years to buy a car. She opens an account today which pays interest of
years? 4% pa, compounded quarterly.

(A) 1.020 Using the table, which expression calculates the minimum single sum that Amy needs to invest today to
ensure she reaches her savings goal?
(B) 1.082
A. 21 000 × 1.0816
(C) 1.083
B. 21 000 ÷ 1.0816
(D) 1.369
C. 21 000 × 1.0829
D. 21 000 ÷ 1.0829
13. Financial Maths, STD2 F4 2005 HSC 13 MC
Last year, Helen bought 150 shares at $2.00 per share. They are now worth $2.50 per share. Helen
receives a dividend of $0.10 per share.
What is the dividend yield?
(A)
(B)
(C)
(D)
15. Financial Maths, STD2 F1 2007 HSC 23a 19. Financial Maths, STD1 F2 2021 HSC 14
Lilly and Rose each have money to invest and choose different investment accounts. It costs $2.45 for a car to travel on a toll road. Due to inflation, the cost is to increase by 3% each year.
The graph shows the values of their investments over time. How much will it cost for a car to travel on the toll road in 5 years time? (2 marks)

20. Financial Maths, STD2 F4 2020 HSC 21

The inflation rate over the year from January 2019 to January 2020 was 2%.
The cost of a school jumper in January 2020 was $122.
Calculate the cost of the jumper in January 2019 assuming that the only change in the cost of the jumper
was due to inflation. (2 marks)

21. Financial Maths, STD2 F4 2019 HSC 21

A person owns 1526 shares with a market value of $8.75 per share. The total dividend received for these
shares is $1068.20.
Calculate the percentage dividend yield. (2 marks)

22. Financial Maths, STD2 F4 2021 HSC 26

i. How much was Rose’s original investment? (1 mark) Nina plans to invest $35 000 for 1 year. She is offered two different investment options.

ii. At the end of 6 years, which investment will be worth the most and by how much? (2 marks) Option A: Interest is paid at 6% per annum compounded monthly.

iii. Lilly’s investment will reach a value of $20 000 first. Option B: Interest is paid at % per annum simple interest.

How much longer will it take Rose’s investment to reach a value of $20 000? (1 mark) a. Calculate the future value of Nina's investment after 1 year if she chooses Option A. (2 marks)

b. Find the value of in Option B that would give Nina the same future value after 1 year as for Option A.
Give your answer correct to two decimal places. (2 marks)
16. Financial Maths, STD2 F4 2008 HSC 24c
Heidi’s funds in a superannuation scheme have a future value of $740 000 in 20 years time. The interest
23. Financial Maths, STD2 F4 SM-Bank 1
rate is 4% per annum and earnings are calculated six-monthly.
What single amount could be invested now to produce the same result over the same period of time at the An investment fund purchases 4500 shares of Bank ABC for a total cost of $274 500 (ignore any
same interest rate? (3 marks) transaction costs).
The investment fund is paid a divided of $3.66 per share in the first year.

17. Financial Maths, STD2 F4 2015 HSC 26d i. What was the purchase price of 1 share? (1 mark)

ii. Calculate the divided yield. (1 mark)

A family currently pays $320 for some groceries.
Assuming a constant annual inflation rate of 2.9%, calculate how much would be paid for the same
groceries in 5 years’ time. (2 marks) 24. Financial Maths, STD2 F4 2014 HSC 30a
Chandra and Sascha plan to have $20 000 in an investment account in 15 years time for their grandchild’s
18. Financial Maths, STD2 F4 2017 HSC 26e university fees.
The interest rate for the investment account will be fixed at 3% per annum compounded monthly.
Sam purchased 500 company shares at $3.20 per share. Brokerage fees were 1.5% of the purchase price.
Calculate the amount that they will need to deposit into the account now in order to achieve their plan. (3
Sam is paid a dividend of 26 cents per share, then immediately sells the shares for $4.80 each. marks)
If he pays no further brokerage fees, what is Sam’s total profit? (3 marks)
25. Financial Maths, STD2 F4 2011 HSC 23c 27. Financial Maths, STD2 F4 2020 HSC 29
An amount of $5000 is invested at 10% per annum, compounded six-monthly. Jana owns a share portfolio. Details of her share portfolio at 30 June 2020 are given in the table.

Company Numbers of shares Dividend yield Market price

name in Jana's portfolio (per annum) per share
ABC 200 6.0 % $5.50
XYZ ? 4.0 % $6.00

Jana received a total annual dividend of $149.52 from her share portfolio.
Calculate the number of shares Jana has in company on 30 June 2020. (3 marks)

28. Financial Maths, STD2 F4 2021 HSC 30

Ariana owns 1500 shares in a company. The market price for each share is $27. Ariana's total dividend
from these shares is $810.
Use the table to find the value of this investment at the end of three years. (2 marks)
Calculate the dividend yield for her shares. (2 marks)

26. Financial Maths, STD2 F4 2013 HSC 26e

29. Financial Maths, STD2 F4 2013 HSC 28d
Kimberley has invested $3500.
Interest is compounded half-yearly at a rate of 2% per half-year. Adhele has 2000 shares. The current share price is $1.50 per share. Adhele is paid a dividend of $0.30
per share.
i. What is the current value of her shares? (1 mark)

ii. Calculate the dividend yield. (1 mark)

Copyright © 2004-23 The State of New South Wales (Board of Studies, Teaching and Educational Standards NSW)

Use the table to calculate the value of her investment at the end of 4 years. (2 marks)
Worked Solutions 5. Financial Maths, STD2 F4 2017 HSC 10 MC

1. Financial Maths, STD2 F4 2009 HSC 6 MC

2. Financial Maths, STD2 F4 2022 HSC 10 MC

6. Financial Maths, STD2 F4 2019 HSC 13 MC

7. Financial Maths, STD2 F4 2019 HSC 3 MC

3. Financial Maths, STD2 F4 2015 HSC 17 MC

8. Financial Maths, STD2 F4 2020 HSC 4 MC

4. Financial Maths, STD2 F4 2016 HSC 8 MC

9. Financial Maths, STD2 F2 2021 HSC 5 MC 14. Financial Maths, STD2 F4 2018 HSC 19 MC

♦♦ Mean mark 33%.

10. Financial Maths, STD2 F4 2022 HSC 11 MC

15. Financial Maths, STD2 F1 2007 HSC 23a
i.

ii.

11. Financial Maths, STD2 F4 2023 HSC 10 MC

iii.

16. Financial Maths, STD2 F4 2008 HSC 24c

12. Financial Maths, STD2 F4 2012 HSC 9 MC

♦♦♦ Mean mark 24%. The lowest MC

mean mark in the 2012 exam.
COMMENT: A process to follow: 1-
convert the annual rate to the rate
per compounding period. 2-calculate
the number of compounding
periods.

13. Financial Maths, STD2 F4 2005 HSC 13 MC 17. Financial Maths, STD2 F4 2015 HSC 26d
18. Financial Maths, STD2 F4 2017 HSC 26e 22. Financial Maths, STD2 F4 2021 HSC 26

a.

b. ♦♦ Mean mark part (b) 36%.

19. Financial Maths, STD1 F2 2021 HSC 14

23. Financial Maths, STD2 F4 SM-Bank 1

i.

20. Financial Maths, STD2 F4 2020 HSC 21 ii.

21. Financial Maths, STD2 F4 2019 HSC 21

24. Financial Maths, STD2 F4 2014 HSC 30a 27. Financial Maths, STD2 F4 2020 HSC 29

♦ Mean mark 49%

♦ Mean mark 43%.

25. Financial Maths, STD2 F4 2011 HSC 23c

♦♦ Mean mark 28%

MARKER’S COMMENT: Remember
that the number of periods is the
number of “compounding periods”
and when asked to use the table, use 28. Financial Maths, STD2 F4 2021 HSC 30
the table!

♦ Mean mark 47%.

26. Financial Maths, STD2 F4 2013 HSC 26e

♦ Mean mark 44%

COMMENT: Structure your answer:
1-Find the interest rate per
compounding period (same in this
case). 2-Find the number of
compounding periods.
29. Financial Maths, STD2 F4 2013 HSC 28d

i.

♦♦♦ Mean mark 13%

MARKER’S COMMENT: A large
majority of students had a poor
ii. understanding of the term dividend
yield.

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