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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 3RD JUNE2011
TIME 1HR
INSTRUCTIONS:ANSWER ALL QUESTIONS

1. Determine the present value of an annuity if the amount of each payment is sh 2000 payable at the end of each year for 4 years and the interest rate is 6% compounded annually.(4MKS)
2. A customer X purchased a color TV from a TV shop for sh.12,800. He made a down payment of 4,000 and agreed to pay the balance in 24 equal monthly payments. If interest charged was 12% compounded monthly, how much should X pay every month?(3MKS)
3. An investor expects to deposit sh. 15,000 each year for the next 10 years. The discounting rate is 10%. Compute the present value of these annuities.(4MKS)
4. An investor expects to receive sh. 800 p.a divindeds from a company in perpetuity. The cost of capital is 15%. Compute the present value of the annuity in perpetuity.(4MKS)

5. A freehold estates is bought for sh.4,000,000. At what rent should it be let so that the owner may receive 12% on the purchase money?(2MKS)

6. How many years’ purchase should be given for a freehold estate if the rate of interest is 8% p.a.?(2MKS)
7. If a perpetual annuity is worth 25 years’ purchase, find the annuity to continue for 3 years which can be purchased for sh, 5,000.(3MKS)
8. If an annuity of sh.3,000 for 5 years at 8% is to begin in 3 years’ time from now, what would be its present value?(3MKS)

Management Maths 1 Question Paper

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