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IB Maths AA SL 1.4 Financial Applications Questions

Practise IB Maths AA SL Financial applications with SL questions that develop route-specific sequence or financial reasoning and exam accuracy.

Syllabus
First assessment 2021
Course
Maths AA SL
Level
SL

Exam points

  • Calculate compound growth or annual depreciation with the correct rate, period and compounding frequency, using a financial package or formula.
  • Solve inverse financial problems for a target amount, required rate, time or initial deposit, checking inequalities and rounding in context.
  • Compare nominal returns with inflation to find a real value or real rate, and interpret how compounding frequency changes the outcome.
  • Model regular deposits, withdrawals, loans or annuities as geometric sums and determine balances, repayments or the time until a target is reached.

Learn this topic

Study SL 1.4—Financial applications conceptsOpen the corresponding Concept lesson for explanations, examples and exam connections.

IB Maths AA SL 1.4 Financial Applications Questions question 1

[Maximum number: 4]

Give your answers to parts (a)(ii), (c)(i) and (d) correct to two decimal places.
Daniela and Sorin have each recently received some money. Daniela won a cash prize and Sorin received an inheritance.
Daniela had two options to choose from to receive her winnings. In both options she receives a payment on the first day of each month for three years.
Option A Each payment is $ 5500.
Option B The first payment is $ 2000. In each month which follows, the payment is 6 % more than the previous month.

Question (a)

(a)

Write down an expression for the value of Sorin's investment after n years.

Daniela chose Option B and received her first payment on 1st 1^{\text {st }} January 2023. Sorin invested his inheritance on the same day.

[ 1 ]

Question (b)

(b)

Find the value of r if this investment grows to $ 53000 after six years.

[ 3 ]
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