hi there i would like you guys to complete the second section of my mathematics assessment
Year 12 Mathematics Standard 2: Financial Mathematics Assessment Task Section 1: Your task is to research 3 different credit cards with different annual fees, interest free periods, interest rates and minimum monthly repayment requirements A) tabulate your results detailing the features of all 3 cards Commonwealth Bank Low Fee Gold credit card Suncorp Standard Credit Card Suncorp Gold Credit Card B) if $1000 worth of purchases is modern the 1st of each month for 3 months: I) calculate how much the closing balance will be at the end of the third month for each of the cards with only the minimum monthly payments made Commonwealth Bank Low Fee Gold Credit Card 1st Month $1000 Yearly: 19.74% 197.40 ÷ 12 = $16.45 per month 1000 – 16.45 = $983.55 2nd Month $1000 + 983.55 = $1983.55 1983.55 x 19.74% ÷ 100 396.20 ÷ 12 = 32.62 Monthly 1983.55 – 32.62 = $1950.93 3rd Month 1950.93 + 1000 = $2950.93 2950.93 x 19.74 ÷ 100 = 582.51 ÷ 12 = $48.54 2950.93 – 48.54 = $2902.39 Suncorp Standard Credit Card 1st Month $1000 Yearly: 19.74% 197.40 ÷ 12 = $16.45 Monthly 1000 – 16.45 = $983.55 2nd Month $1000 +989.383 = $1989.383 1989.383 x 12.74% =25,344.73 ÷ 100 = 253.44 ÷ 12 = $21.1206 =1989.383 – 21.1206 = $1968.2624 3rd Month $1968.2624 + 1000 = $2968.2624 2968.2624 x 12.74% = $37,815.66 37,815.66 ÷ 100 = $378.156 378.156 ÷ 12 = 31.513 2968.2624 – 31.513 = $2936.7494 Suncorp Gold Credit Card 1st Month $1000 Yearly: 20.50% 250 ÷ 12 = $20.83 Monthly 1000 – 20.83 = $979.17 2nd Month $1000 + 979.17 = $1979.17 1979.17 x 20.50% = 40,572.98 ÷ 100 = $405.729 ÷ 12 = $33.8108 1979.17 – 33.810 = $1945.36 3rd Month $1945.36 + 1000 = $2945.36 2945.36 x 20.50% = $60,379.88 60,379.88 ÷ 100 = $603.79 603.79 ÷ 12 = $50.31 2945.36 – 50.31 = $2895.05 ii) which card is the cheapest to own in this scenario based solely on the closing balance? Justify your response by making reference to the closing balance of each card. By analysing the 3 different credit cards closing balance at the end of the 3rd month it is evident that the Suncorp Gold Credit Card was the cheapest option as the card had a closing balance of $2865.56. whilst the other 2 credit cards (Suncorp Standard and Commonwealth low fee gold credit cards) had a significantly higher closing balance which can be seen through the Suncorp Standard Credit Card which had a closing balance of $2932.16 and the Commonwealth Bank low fee gold Credit Card which had a closing balance of $2902.93. this is evident as the Suncorp Gold Credit Card had a higher interest rate of 20.50% and an interest free period leading to the differentiation between the other credit cards iii) which card would you recommend in this scenario considering the closing balance AND other fees associated with the card? Justify your response by making reference to the closing balance and the other fees associated with each other the 3 different credit cards reveal that the Suncorp Gold Credit Card would be the most affordable. This is a result of the differentiation between the Suncorp Standard, Suncorp Gold and commonwealth low fee gold credit cards. When the closing balance and expenses of the credit cards are analysed there is a clear representation that by incorporating the expenses to the closing balances, the Suncorp Gold credit card remains the most affordable with a closing balance of $2865.56 which incorporates a higher annual fee compared to the Suncorp Standard with a closing balance of $2932.26 which incorporates a low rate of annual fee whilst the Common Wealth Bank low fee gold credit card has a stable balance of $2902.39 as it does not have expenses associated with the credit card Section 2. research home loan annual interest rates from one of the banks you will be borrowing $700,000 for the purchase cost of a house. a) State the financial institution chosen with the interest rate and provide a screenshot of the website as evidence. The Westbank home loan had a interest rate of 3.28% b) Using the formula below, calculate the minimum monthly payment for the loan using your researched rate if the loan is to be repaid over 20 years. c) Construct a spreadsheet to show the progress of the $700,000 reducible interest loan using the researched rate with a monthly repayments of $5,000 (1 + 0.0328) – 1 0.0328 (1 + 0.0328) 700,000 = M 700,000 = M (0.9682416731) 700,000 0.9682416731 M 12 x 20 = 240 M = 722,960 ÷ 240 M = $3,012.33 2 | Page Financial Mathematics Assessment Task YEAR 12 MATHEMATICS 2007 YEAR 12 MATHEMATICS STANDARD 2 2019/2020 ASSESSMENT TASK 1 ASSIGNMENT AND TEST NOTIFICATION Course: Mathematics Standard 2 Topic examined: Financial Mathematics Text book: New Century Maths Mathematics Standard 2 chapters 1 and 4 Total weighting: 20% Assignment Due date: Week 1, Term 1 2020 Weighting: 15% Test Date: Week 1, Term 1 2020 Time: 1 period Weighting: 5% Outcomes to be assessed MS-F4:Investments and Loans MS-F5:Annuities MS2-12-5 makes informed decisions about financial situations, including annuities and loan repayments MS2-12-9 chooses and uses appropriate technology effectively in a range of contexts, and applies critical thinking to recognise appropriate times and methods for such use MS2-12-10 uses mathematical argument and reasoning to evaluate conclusions, communicating a position clearly to others and justifying a response Nature and description of the task: This task will involve an investigative assignment followed by an in-class test. This investigative assignment involves researching information from financial institutions in order to represent financial models and analyse the effect of changing the various factors that are associated with credit cards and home loans. You will also be completing a test that will examine the concepts covered by these outcomes (chapters 1 and 4 as well as any relevant worksheets). Research Assignment In groups of TWO or individually: 1. Your task is to research 3 different credit cards with different annual fees, interest free periods, interest rates and minimum monthly repayment requirements. (You must have at least one card with an interest free period, one with no interest free period, at least one card with an annual fee and one card with no annual fee, from at least 2 different financial institutions.) a) Tabulate your results detailing the features of all 3 cards. 3 marks You need to ensure that you have selected different credit cards to the other groups in class and provide a screenshot of the details for each of the cards as evidence. b) If $1000 worth of purchases is made on the 1st of each month for 3 months: i. Calculate how much the closing balance will be at the end of the third month for each of the cards with only the minimum monthly payments made. 9 marks All working out must be shown for each month and assume the opening balance to be $0 at the beginning of the first month. ii. Which card is the cheapest to own in this scenario based solely on the closing balance? Justify your response by making reference to the closing balance of each card. 2 marks iii. Which card would you recommend in this scenario considering the closing balance AND other fees associated with the card? Justify your response by making reference to the closing balance and the other fees associated with each card. 3 marks 2. Research home loan annual interest rates from one of the banks. You need to ensure that you have selected a different rate/financial institution to the other groups in class. You will be borrowing $700 000 for the purchase cost of a house. a) State the financial institution chosen with the interest rate and provide a screenshot of the website as evidence. 1 mark b) Using the formula below, calculate the minimum monthly payment for the loan using your researched rate if the loan is to be repaid over 20 years. Show all necessary working out. 2 marks c) Construct a spreadsheet to show the progress of the $700 000 reducible interest loan using the researched rate with a monthly repayment of $5000. Save this spreadsheet workbook using names of the people in your group and this sheet should be named ‘Monthly Repayment’. 3 marks How long will it take to pay off the loan in years and months? 1 mark What was the total interest paid? 2 marks d) In the same workbook, copy the ‘Monthly repayment’ sheet and name it ‘Fortnightly Repayment’. Edit the spreadsheet to make the repayment $2500 per fortnight and adjust the calculations accordingly. 2 marks How long will it take to pay off the loan with the fortnightly repayment in years and fortnights? 1 mark What was the total amount of interest saved in comparison to the monthly repayment in part (c)?