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Finance, growth and decay

14 marks in our Paper 1 questions. 4 questions from 2024.

Practise this topic, marked

This topic covers compound interest, straight-line and reducing-balance depreciation, and loans repaid by monthly instalments. The 4 questions here are worth 14 marks in the November 2024 Paper 1 set. Of the 14 marks, 8 are for the correct final answer and 6 for method and working. A clear formula with the right numbers substituted earns the method marks.

The 2024 Diagnostic Report says candidates muddle the compounding periods: the rate is not divided by 4 for quarterly interest, or the number of quarters is miscounted. Reducing-balance depreciation is used where straight-line depreciation, which works like simple interest, is needed. Longer loan questions with several steps were often left blank. Read how often interest is added, write the rate and the number of periods on the same basis, and then substitute.

Where marks are lost: in our words, from Department of Basic Education, NSC 2024 Diagnostic Report, Part 1 (Book 1).

Questions

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On the day Sipho was born, his aunt invested R10 000 in a savings account. The account earns interest at 4% p.a., compounded quarterly. Calculate how much is in the account on Sipho’s 10th birthday, if nothing is added or withdrawn.
(3)Based on Nov 2024 · Paper 1 · Q7.1
A laptop loses value over time using the straight-line method of depreciation. After 5 years, its value is exactly one fifth less than its original value, that is, it is worth 45 of what it cost. Calculate the annual rate of depreciation, as a percentage.
(2)Based on Nov 2024 · Paper 1 · Q7.2
Naledi borrowed R80 000 from a bank on 1 July 2023. She agreed to repay the loan over 4 years in equal monthly instalments of R2 000 each, with the first instalment paid on 1 August 2023. Calculate the total interest that she will pay over the 4 years.
(2)Based on Nov 2024 · Paper 1 · Q7.3.1
Sipho took out a loan of R80 000 on 1 June 2021 at an interest rate of 12% p.a., compounded monthly. He agreed to repay the loan over 5 years by paying monthly instalments of R1 779,55, with the first instalment on 1 July 2021. On 1 June 2023 Sipho paid R16 779,55 into the loan account. This was his usual instalment plus an extra R15 000. He keeps paying the usual instalment every month after that. Calculate how many whole months earlier than planned Sipho will finish repaying the loan.
(7)Based on Nov 2024 · Paper 1 · Q7.3.2

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