IB Maths AI SL 1.4 Financial applications Question Bank

Practise IB Maths AI SL 1.4 through questions on compound interest, depreciation, inflation, savings and financial time thresholds.

Exam points

Apply SL compound-interest, depreciation or inflation formulae with the correct rate interval.
Calculate future value, present value or a minimum time using a financial model.
Check compounding periods, signs, rounding and currency units before interpreting the answer.

[Maximum number: 3]

Give all answers in this question to the nearest dollar.
Anika invested 10000 Canadian dollars (CAD) in an account which earns a nominal annual interest rate of 3.4 %, compounded monthly.

Calculate the value of Anika's investment after 6 years.

Anika wants to purchase a house that costs 225000 CAD. Anika uses the value obtained in part (a) to make an initial payment on the house and takes out a loan to pay the rest.

EITHER
N=72
(M1)(A1)
I %=3.4
$P V= \pm 10000$
P / Y=12
C / Y=12
Note: Award M1 for an attempt to use a financial app in their technology (i.e., at least three entries seen, but not necessarily correct), A1 for all entries correct.

OR
N=72
I %=3.4 / 12
$P V= \pm 10000$
P / Y=1
C / Y=1
Note: Award M1 for an attempt to use a financial app in their technology (i.e., at least three entries seen, but not necessarily correct), A1 for all entries correct.

OR
attempt to substitute into the compound interest formula
$F V=10000 \times\left(1+\frac{3.4}{100 \times 12}\right)^{6 \times 12}$

THEN
(FV =) 12259 (CAD)

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SL 1.4—Financial applications question 1