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4024/22 Oct/Nov 2020, Question 1: Simple Interest

Cambridge O Level Mathematics 4024 · Paper 22 (Calculator) · Calculator · 11 marks

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The question, in short

Work through four money problems: car instalments with a 15% deposit and 24 payments of $500, a 12% sale reduction to $286, dollar-pound-euro exchange rates, and comparing compound versus simple interest on $1500 at 1.9% over 5 years.

Summarised in our own words. Use the official paper for the exact wording and any diagrams.

Part (a) · 3 marks

Find the total cost of the car from a 15% deposit on $13000 plus 24 monthly payments of $500.

  1. 1Deposit = 13 000 × 0.15 = $1950
  2. 2Instalments = 24 × 500 = $12 000
  3. 3Total = 1950 + 12 000 = $13 950

Answer13 950

Part (b) · 2 marks

Find the original phone price given a 12% reduction gives a sale price of $286.

  1. 1$286 is 88% of the original price
  2. 2Original price = 286 ÷ 0.88 = $325

Answer325

Part (c) · 2 marks

Using $1 = £0.71 and €1 = £0.87, find the dollar-to-euro rate to 2 decimal places.

  1. 1$1 = £0.71 = €(0.71 ÷ 0.87)
  2. 20.71 ÷ 0.87 = 0.816…
  3. 3$1 = €0.82

Answer0.82

Part (d) · 4 marks

Compare $1500 at 1.9% compound interest with $1500 at 1.9% simple interest after 5 years; find the difference.

  1. 1Samuel: 1500 × 1.019⁵ = $1648.02
  2. 2Nina: 1500 × 1.9 × 5/100 + 1500 = $1642.50
  3. 3Difference = 1648.02 − 1642.50 = $5.52

Answer5.51 or 5.52

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