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Management Maths 1 Question Paper

Management Maths 1

Course:Bachelor Of Commerce

Institution: Kenyatta University question papers

Exam Year:2011

KENYATTA UNIVERSITY
CAT 1 2011
DATE 20 MAY 2011
TIME 1HR
INSTRUCTIONS:ANSWER ALL QUESTIONS

1. £100 is subject to interest at 12%, compounded quarterly. What is the accrued amount after one year?(2MKS)
2. A finance company advertises money at 22% nominal interest, but compounds monthly. Find the APR.(6MKS)
3. Calculate the effective annual rate of interest of:(6MKS)
(i). 16% compounded quarterly
(ii). 18% compounded monthly
4. A company will have to spend £300,000 on new plant in two years from now. Currently investment rates are at a nominal 10%.
(i). What single sum should now be invested, if compounding is six-monthly?(4MKS)
(ii). What is the APR(2MKS)
5. Ushirika bank offers depositors a nominal interest rate of 12% per annum, with interest payable quarterly. If sh. 20,000 is deposited with this bank then find the total amount on compound basis after 2 years.(4MKS)
6. An investment of sh. 100,000 earns interest at 6% per year compounded semiannually. If all interest rate are reinvested, what will the value of the investment be after 5 years?(6MKS)
1. A mainframe computer whose cost is sh. 220,000 will depreciate to a scrap value of sh. 12,000 in 5 years.(3MKS)
(i). If the reducing balance method of depreciation is used, find the depreciation rate(3MKS)
(ii). What is the book value of the computer at the end of the third year?2MKS)
(iii). How much more would the book value be at the end of the third year if the straight line method of depreciation had been used?(4MKS)

Management Maths 1 Question Paper

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