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Bmath 004 Question Paper
Bmath 004
Course:Certificate Of Bridging Mathematics
Institution: Kabarak University question papers
Exam Year:2010
INSTRUCTIONS:
1. Attempt question ONE and any other TWO questions.
2. Show your workings clearly.
1. Brian deposited Kshs. 68,000 on 17th September 2009 to his new account with NIC bank
which earned an interest at a rate of 12% compounded daily. On 8th of February he added
another Kshs. 35,000 to the same account. Determine the maturity value and the
compound interest Brian earned by 28th February 2010.
2. Moses bought an electronic item on higher purchase by depositing Kshs. 6, 000 followed
by 24 monthly installments of Kshs. 1,500. If compound interest was charged on unpaid
balances at 10%, determine the cash price of the item.
3. A company has goods available for sale valued at Kshs. 6,200,000 in 2010. This includes
50 boxes of unsold items from the previous year valued at Kshs. 5,000 per box. The
operation expenses for the year are Kshs. 820,000 while inventory on 31st December
2010 is kshs. 120,000 some items were found defective and a sales allowance of
Kshs 65,000 allowed while 20 items with an initial price of Ksh. 1,800 per item were
returned to the company. If the company’s sales amounted to kshs. 8,500,000 draw up an
income statement and determine the Gross profit and Net income.
4. You plan to purchase a house costing Kshs. 4,500,000 through mortgage. The down
payment is 8% of the cost and the mortgage company charges an interest of 22%.
Determine the total interest you will pay and the monthly installment payments if you
intend to repay the loan in 20 years.
5. The total outstanding shares of a company are 4,500. The common stock have a per value
of Kshs. 80 per share while the preferred stock are 6% cumulative with a par value of
Kshs. 50 per share. During the past three years no dividend was paid and the company
announces a dividend of Kshs. 800,000 to be distributed this year. If a third of the shares
are preferential share, determine:
a) Dividend per share of common stock
b) Dividend per share of preferred stock
6. You have some money which you intend to distribute as follows: ½ of the money to your
sister, ¼ of the remainder to your brother and ½ of the remainder to your cousine and you
remain with a balance of kshs. 2000. Determine how much you had.
7. Joyce plans to invest a sum o money that will give her a payment of Kshs. 8,000 each
year for next 10 years. Determine the present value if interest is 9% compounded
monthly
8. A young man earns Kshs. 10,000 per month out of which he pays ¼ of the balance for
transport. What percent of his money does he spend on transport?
SECTION TWO
1. a) Three partners A,B and C had fixed investments of Kshs. 250, 000. Kshs. 300,000
and Kshs. 180,000 respectively. The net profit for the year to be distributed was
Kshs. 120,00 as follows:
(i) Payment of 6% interest on investment be made first
(ii) The next ¼ of the profit to be shared using a ratio 3: 2: 1
(iii)The next 20% of the profit to be shared according to the proportion of their
investments
(iv) The balance if any to be shared according to proportion of their investment
(v) The balance if any to be shared equally
Determine how much of the net profit each partner receive
b) In the second year they agreed to admit partner D. however they agreed to share their
income in the ratio ½ : ¼ : 1/3: 1/6 . if their net income for the second year to be
distributed was Kshs. 180,000, determine how much each partner received.
2. a) Job claims a personal relief of Kshs. 1,250 per month and is deducted the following:
i. NHIF – 2,000
ii. Pension- 2% of his basic salary
iii. NSSF – 400
His basic salary per month is Kshs. 68, 000 and he draws a house allowance of
Kshs. 12,000. 15,000, utility allowance of Kshs. 8,000 and medical allowance of
Kshs. 12, 000. Determine jobs PAYE and income if the employer applies the following
tax schedule
Income Group Tax Rate
First 10, 160 10%
Next 9,560 15%
Next 9, 560 25%
Balance 30%
b) Assume that jobs employer applied a tax rate instead of a tax schedule in (a) above.
Determine the tax and net pay for job if the tax rate applied was 32%
3. a) You plan to take a loan of Kshs. 800,000 to finance your undergraduate degree. The
bank gives you the following options under which you can take the loan:
(i) A compound interest of 5% compounded monthly for 6 years
(ii) A simple interest of 12% for 11 years
(iii)Compound interest of 8% compounded quarterly for 4 years. Which option will
you chose and why.
b) Determine the exact and ordinary interest on a loan of Kshs. 98,000 for the period
between 10th October and 22nd December 2010
c) Student A scored 33 out of 64 marks and student b scored 41 out of 77 marks. Which
student performed better than the other?
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