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Bmath 004: Business Mathematics Question Paper
Bmath 004: Business Mathematics
Course:Certificate In Bridging Mathematics
Institution: Kabarak University question papers
Exam Year:2009
COURSE CODE: BMATH 004
COURSE TITLE: BUSINESS MATHEMATHICS
STREAM: BRIDGING
INSTRUCTIONS:
Attempt Question ONE and Any other TWO Questions
QUESTION ONE (20 marks)
a) i) Define Profit.
ii) Kimani bought a crate of 20 loaves of bread at sh.430 and sold each loaf at sh.23.Calculate
his profit/loss [4 marks]
b) Find the simple interest on sh.200, 000 for 5 years at 8% p.a. [2 marks]
c) Peter has invested Shs.10, 000 in a fixed account earning compound interest at the rate of 2%
half yearly. How much money does he get after 4 years? [4 marks]
d) Calculate the present value of a pension of sh.12, 000 per annum (in perpetuity) at interest rate
7.5% [2 marks]
e) Calculate the amount of V.A.T charged on an item whose retail price is sh.145
[3 marks]
f) An item is sold under HP on a deposit of sh.600 and 12 monthly installments of sh.300 each.
If the HP price is 12% higher than the cash price, calculate the cash price. [3 marks]
g) Juma is traveling to U.K and needs 500 sterling pounds for transport. How much will Juma pay
if £1 is exchanged for sh.112? [3 marks]
h) Calculate the sum of the first 14 terms of the G.P. 3, 9, 27,…..… [2 marks]
i) Solve the simultaneous equations 3u + v = 15, u + v = 7 [3 marks]
j) Express 20% as a ratio [2 marks]
k) State any four types of annuity [2 marks]
QUESTION TWO (20 marks)
a) Calculate the maturity value of a fund paying 9.5% into which 5 annual payments of sh.2,
400 are made [3 marks]
b) The tenants of a rented house have their rent fixed at sh.1, 650 per annum in advance with
immediate effect. They plan to stay in the property for 15 years. Find the total value of
payments (in today’s terms), if the average discount rate is estimated at 10%. [4 marks]
c) A company borrows sh 46, 000, which is compounded at 15%, to finance a new
production line. The debt will be discharged at the end of the 5 years with regular annual
payments into a sinking fund which pays 11.25%.Calculate the annual payment into the
fund and construct a schedule, assuming that the first payment into the fund is made at the
end of the first year. [7 marks]
d) After how long will sh.50, 000 amount to sh.75, 000 under simple interest at the rate of
10% half yearly [3 marks]
e) An iron box costs shs. 500. Every year, it depreciates by 10 % of its value at the beginning
of that year. Calculate its value after 4 years [3 marks]
QUESTION THREE (20 marks)
a) Njeri bought 1200 mangoes for her business at a price of sh.50 for every 60 mangoes. She
discovered that 20 mangoes were rotten and that her family members had consumed 30
mangoes. She sold each of the remaining mangoes at sh.1.25
i) Calculate her profit [3 marks]
ii) Express the buying price to the selling price as a ratio [1 mark]
iii) Calculate the mark-up and margin [4 marks]
b) If sh.7,500 is invested for 4 years at compound interest, at what rate will the money amount
to sh.9,116.30 [4 marks]
c) Peter has invested shs.10, 000 in a fixed deposit account earning compound interest at the
rate of 2% half yearly. How much money does he get after 4 years? [4 marks]
d) Find the amount of money invested in 5 years at 11% p.a compound interest to amount to
sh.79, 600. [4 marks]
QUESTION FOUR (20 marks)
a) Calculate the amount of monthly income tax that Mwamba would pay if he earns k£ 8,000
p.a [4 marks]
a) What would be his earning per month if he is married pays an insurance premium of sh.5,
000 per year and he is given the appropriate relief? [3 marks]
b) What is Annett’s net monthly pay if she is single and supporting a son, she earns a gross
salary of £9920 p.a and she claims appropriate relief. [4 marks]
Use the rates below
Income SLAB
K£ p.a
Rate
Sh.per £ %
1 - 1980 2 10
1981 – 3960 3 15
3961 – 5940 5 25
5941 – 7920 7 35
7921 – 9900 9 45
9901 and over 10 50
c) A producer sells some items to a wholesaler at sh.10, 000.The wholesaler then sells the
items to a retailer at shs.20, 000.The retailer the sell each of the 1,000 items to consumers
at sh.25
i) Calculate the profit made by the wholesaler and retailer [2 marks]
ii) The government introduces VAT at the rate of 15% on these items
a. How much should each trader sell the items to make the same profits as before?
[2 marks]
b. How much VAT does each of the traders pay? [2 marks]
e) Use the table of exchange rates given below to answer the questions
US$ 1 = KSH.75
Ush. 1 = KSH.0.04
Tsh. 1 = KSH.0.08
i) Find the number of Ush. being exchanged for one US dollar [1 mark
ii) Find the exchange rate between the Ush. and Tsh [1 mark]
iii) How much cash will a German tourist get in exchange for his 5,000 Deutschmark ifPage 5 of 4
DM.1 = Tsh.425 [1 mark]
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