VCE SCHOOL ASSESSED COURSEWORK
Name:
Subject & Unit: Year 12 General Mathematics
Subject Teacher: Ms Cooper, Mr Elias, Mr Haniff, Mrs Khatri
Area of Study: Unit 3 – Core – Recursion and Financial Modelling
SAC Name and # Blake - Part 2
Due Date: 29th May, 2023
Conditions and Pens, pencils, eraser, highlighters, ruler, sharpener
allowable Calculator (scientific/CAS)
materials: Reference book
This paper:
Marks allocated
Outcomes
Marks available: Outcome 1 7
Outcome 2 18
Outcome 3 5
TOTAL MARKS 30
STUDENT DECLARATION:
I declare that the work submitted in relation to this task is all my own and
I have not received unwarranted assistance from teachers, tutors or
anyone else prior to its completion. My work has been completed
according to the guidelines set by my teacher and school and in
accordance with rules set down by the VCAA. I understand that the
submission of part, or all, of someone else’s work constitutes plagiarism
and I accept the consequences which will be imposed should I do so.
Student signature: __________________________________ Date: ___________
Core: Recursion and financial modelling SAC Performance Criteria Per Outcome
Outcome 1 (5 marks) Define and explain key concepts as specified in the content from Recursion and
financial modelling and apply related mathematical techniques and models in routine contexts
Criterion
Appropriate use of mathematical conventions, symbols and terminology
Model and analyse growth and decay in financial contexts using a first-order linear recurrence
relation of the form u0 =a , un+1 =b un +c
Use a rule for the future value of a compound interest investment or loan, or a depreciating
asset, to solve practical problems
Definition and explanation of key concepts
The concepts of financial mathematics including simple and compound interest.
Find the present value or future value of a compound interest investment or loan.
Use an amortisation table to investigate an annuity.
Accurate use of mathematical skills and techniques
With the aid of technology with financial mathematics capabilities, solve practical problems
associated with compound interest investments and reducing balance loans.
Use a table to investigate and analyse on a step–by-step basis the amortisation of a reducing
balance loan
Outcome 2 (10 marks) Select and apply the mathematical concepts, models and techniques from
Recursion and financial modelling in a range of contexts of increasing complexity.
Criterion
Identification of important information, variables and constraints
General formulation of the concepts, techniques and models studied in recursion and financial
modelling.
Identify, recall and select facts, concepts, models and techniques needed to investigate.
Application of mathematical ideas and content from the specified areas of study
Select and implement standard financial models to investigate and analyse a financial situation
that requires the use of increasingly sophisticated models to complete the analysis.
Analyse changes to a financial situation and investigate what effect these changes can have.
Analysis and interpretation of results
Assumptions and conditions underlying the use of the concepts, techniques, and models
associated with recursion and financial modelling.
Interpret and report the results of completing a modelling task in terms of the context under
consideration, including discussing the assumptions in application of these models.
Outcome 3 (5 marks) Select and appropriately use numerical, graphical, symbolic and statistical
functionalities of technology to develop mathematical ideas, produce results and carry out analysis in
situations requiring problem-solving, modelling or investigative techniques or approaches.
Criterion
Appropriate selection and effective use of technology
Use technology to carry out numerical, graphical and symbolic computation as applicable
Select an appropriate functionality of technology in a variety of mathematical contexts, related
to data analysis, recurrence relations and financial modelling, and provide a rationale for these
selections
Application of technology
Apply suitable constraints and conditions, as applicable, to carry out required computations
Produce results using a technology which identify examples or counter-examples for propositions
Produce tables of values, families of graphs and collections of other results using technology,
which support general analysis in the modelling context
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After 4 years, Blake would like to sell the caravan that she had purchased for $18500. It has
depreciated over this time. The caravan travelled an average of 10 000 km each year. Blake
will sell it at its depreciated value. There are three ways she could calculate the
depreciation.
Option 1 Option 2 Option 3
Depreciates by 20% of the Depreciates by 20% of the Depreciates by 26 cents for
purchase price, each year. value of the asset each year each km driven
a. The first three options are common methods to calculate depreciation. State the type of
depreciation for Options 1, 2 and 3. (O1: 3 marks)
b. Compare all options by showing calculations that determine the depreciated amount,
and value of the caravan at the time of selling. (O2: 3 marks, O3: 3 marks)
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c. Explain, with reasons, which option a potential buyer trying to save money, would prefer
Blake to use?
Indicate which option Blake ultimately chooses. (O1: 1 mark, O2: 2 marks)
Blake is 32 years old. Her superannuation balance, when she retires at 67, is predicted to be
$700 000. However, Blake will need more to maintain her luxurious lifestyle. To help achieve
this, she has been advised to invest the money from the sale of her caravan and make some
regular contributions to this investment.
Blake finds a financial institution which is advertising the following:
Best Bank
Annuity paying interest at
the rate of 0.435% per
annum, compounding
quarterly.
She budgets that she can contribute $780 of her annual wage to this annuity. She will do this
in regular payments according to the compounding time period.
d. From her annual wage, what is the contribution Blake would make each quarter?
(O1: 1 mark)
e. If Blake invests $10922.40, find the balance of her annuity when she is 37. (O2: 2 marks)
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f. An incomplete amortisation table of Blake’s investment after one quarter is below. There
are four pieces of information missing, which you must fill-in. (O2: 4 marks)
Payment
number Payment Interest earned Principal addition Balance
0 0 0 0 10922.40
1
_____ _____________________ _______________________ _______________
After 5 years, the Reserve Bank changes the market interest rate. This results in a change of
conditions.
Best bank is now paying interest at the rate of 0.438% per annum, compounding monthly.
Blake’s annual contribution changes from $780 per year to $1188 per year.
g. What would be the value of Blake’s annuity, to the nearest dollar, when she retires?
(O2: 2 marks)
h. Calculate the total amount of contribution Blake made towards the annuity. (O3: 1 mark)
i. If the market interest rate had not changed, how much more or less would Blake have
received at the time of her retirement. (O2: 1 mark, O3: 1 mark)
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As predicted, on retirement, on her 67th birthday, the balance of Blake’s superannuation is
$700 000. She withdraws her annuity from part (g) and adds this to her superannuation.
Blake withdraws $15 000 for her long-awaited trip to Turkey.
j. What is Blake’s new superannuation balance? (O1: 1 mark)
k. Upon her return, Blake hopes to live off a regular payment of $400 per week, whilst
maintaining the balance left in her superannuation. What is the type of account that
would help her achieve this? (O1: 1 mark)
l. Calculate the annual interest rate that would allow Blake to receive a weekly payment
of $400 indefinitely. Give your answer to one decimal place. (O2: 1 mark)
m. Write a recurrence relation that would model this regular payment. Round your answers
to 4 decimal places where appropriate. (O2: 2 marks)
n. What would be the exact value in Blake’s account in 10 years’ time? (O2: 1 mark)
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