smc-6846-60-Spreadsheets

William wants to buy a car. He takes out a loan for $28 000 at 7% per annum interest for four years.

Monthly repayments for loans at different interest rates are shown in the spreadsheet.

How much interest does William pay over the term of this loan? (2 marks)

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`$4183.52`

Show Worked Solution

♦ Mean mark 42%
MARKER’S COMMENT: An incorrect table value used correctly in the following calculations received half-marks here. Show your working!

`text(Loan) = $28\ 000,\ \ \ \ r =\ text(7% p.a.)`

`text(Monthly repayment = $670.49`

`text(# Repayments) = 4 xx 12 = 48`

`text(Total repaid)= 48 xx 670.49= $32\ 183.52`

`:.\ text(Interest paid)`	`=32\ 183.52-28\ 000`
	`=$4183.52`

The table shows monthly home loan repayments with interest rate changes from February to October 2009.

What is the change in monthly repayments on a $250 000 loan from February 2009 to April 2009? (1 mark)

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Xiang wants to borrow $307 000 to buy a house.

Xiang’s bank approves loans for customers if their loan repayments are no more than 30% of their monthly gross salary.

Xiang’s monthly gross salary is $6500.

If she had applied for the loan in October 2009, would her bank have approved her loan?

Justify your answer with suitable calculations. (3 marks)

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Jack took out a loan at the same time and for the same amount as Xiang.

Graphs of their loan balances are shown.

Identify TWO differences between the graphs and provide a possible explanation for each difference, making reference to interest rates and/or loan repayments. (2 marks)

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a. `text(Monthly repayments decrease by $15)`

b. `text(S)text(ince repayments of 1987.29 > 1950, the loan)`

`text(would not have been approved.)`

c. `text(Differences)`

`text(1. Jack’s loan balance falls more sharply for first 12 years)`

`text(2. Jack’s loan balance falls less sharply between years 12-30.)`

`text(Explanation)`

`text(1. Jack made larger repayments for first 12 years, OR)`

`text(Jack made the same repayments but had a lower interest rate)`

`text(for the first 12 years.)`

`text(2. Jack made smaller repayments in years 12 – 30.)`

Show Worked Solution

a.	`text(Repayment)\ text{(Feb 09)}`	`= 1588`
	`text(Repayment)\ text{(Apr 09)}`	`= 1573`

`text(Difference) = 1588-1573 = 15`

`:.\ text(Monthly repayments decrease by $15)`

♦ Mean mark 39%
MARKER’S COMMENT: Borrowing $307,000 can be achieved by borrowing $300,000, and then `7` times the table repayment value for borrowing $1000.

b. `text(Loan) = $307\ 000`

`text{Repayments (Oct 09)}`	`= 1942 + (7 xx 6.47)= 1942 + 45.29`
	`= $1987.29\ text(per month)`

`text(30% Gross salary)= 6500 xx\ text(30%)= $1950\ text(per month)`

`:.\ text(S)text(ince repayments of $1987.29 > $1950, the loan)`

`text(would not have been approved.)`

c. `text(Differences)`

`text(1. Jack’s loan balance falls more sharply for first 12 years.)`

`text(2. Jack’s loan balance falls less sharply between years 12-30.)`

`text{Explanation(s)}`

♦ Mean mark 36%
MARKER’S COMMENT: Explanations were generally poor and many failed to refer directly to the graphs shown, or reference Xiang or Jack directly.

`text(1. Jack made larger repayments for 1st 12 years, OR)`

`text(Jack made the same repayments but had a)`

`text(lower interest rate for the first 12 years.)`

`text(2. Jack made smaller repayments in years 12-30.)`

Financial Maths, STD2 F4 2010 HSC 25b

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Financial Maths, STD2 F4 2011 HSC 22 MC