Series 2 Examination 2012

BUSINESS CALCULATIONS
Level 2 Thursday 5 April Subject Code: 2003

Time allowed: 2 hours 30 minutes

INSTRUCTIONS FOR CANDIDATES Answer all 8 questions. Write your answers in blue or black ink/ballpoint. You may use pencil only for graphs, charts, diagrams, etc. All answers must be correctly numbered but need not be in numerical order. You must show all calculations, where applicable, on the answer paper provided. You can use mathematical and statistical tables. Your work should be accurate and neat. You may use a calculator provided the calculator gives no printout, has no word display facilities, is silent and cordless. The provision of batteries and their condition is your responsibility.

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ASE 2003 2 12 1

Answer all questions QUESTION 1 Zo invested $9,500 Singapore for 4 years and received $1,330 Singapore simple interest in total. (a) Calculate: (i) (ii) the rate of interest per annum (2 marks) the value of the interest in pounds sterling, at a conversion rate of 1 = $1.90 Singapore. (2 marks) In 2011, Zo received 13,200 in salary after payment of income tax. In 2011, the first 6,000 of Zos earnings were treated as personal allowances and were not taxed, and income tax was paid at 20% on the remainder. (b) Calculate Zos earnings before deduction of income tax. (3 marks) A bank makes a loan to Zo of 24,000 to be repaid after 4 years at 2.75% per annum compound interest. Calculate: (c) the total interest received by the bank (4 marks) (d) the average interest per annum received by the bank (2 marks) (e) the interest per annum on 24,000 at 2.75% per annum simple interest. (2 marks) (Total 15 marks)

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QUESTION 2 A builders merchant supplied materials to a builder for a house extensio n. Materials to be supplied are: 250 kg of compound at 0.81 per kg 14 metres of guttering at 5.00 per metre 4.5 metres of piping at 1.40 per metre 9 rolls of roofing felt at 7.12 per roll 7,500 bricks at 28 per 100 Door and frame 149.50 1 Window (a) The total amount charged for materials was 2,664. Calculate: (i) (ii) the amount charged for materials without the window (3 marks) the amount charged for the window. (2 marks) The materials cost the merchant 1,850. (b) Calculate the percentage profit made by the merchant. (3 marks) The builder took 2 months to pay the merchant. (c) Calculate the interest payable on 2,664 borrowed for 2 months at an annual rate of simple interest of 3%. (3 marks) (Total 11 marks)

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QUESTION 3 Three employees, Maureen, Nora and Odette, receive their pay in three different ways. Maureen receives a flat-rate salary of 22,100 per annum. Nora receives a wage of 310 per week, plus 2% commission on sales. Odette receives a standard rate of 8.60 per hour. In a particular week, Nora sells goods to the value of 4,500; Odette works 38 hours at standard rate, plus 5 hours overtime at time-and-a-quarter. (a) Calculate how much each of the three employees received for that week. (8 marks) The annual leave entitlement of the companys employees is given in the following table: Number of Days Leave per Year Category A Category B Category C Category D (b) 22 23 24 25 Number of Employees 20 45 26 19

Calculate the average (mean) number of days leave per employee. (5 marks) (Total 13 marks)

QUESTION 4 A supplier produces 1,600 units of item A per day. To complete a particular order for item A, the supplier requires 9 complete days. (a) Calculate the number of units ordered. (2 marks) The supplier charges 102 pence per unit. (b) Calculate the cost of the order. (2 marks) The number of units returned to the supplier due to defects is 72. (c) Calculate this as a percentage of the quantity ordered. (2 marks) After replacing the defective items, the cost of the order is 14,688. On the invoice, a trade discount of 3% is allowed on this figure, and then a transport charge of 99 is added. (d) Calculate the final invoice total after accounting for trade discount and the transport charge. (3 marks) A cash discount of 1.5% of the final invoice total is allowed for prompt payment. (e) Calculate the amount of the cash discount, and the amount paid if the cash discount is claimed. (4 marks) (Total 13 marks)

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QUESTION 5 A car valued by the owner at 21,500 was insured for an annual premium of 408. A service charge of 3% of the annual premium was added when paying by monthly instalments. The annual premium plus service charge was paid by equal monthly instalments. (a) Calculate the amount of each monthly instalment. (4 marks) The car was damaged and a claim for repairs costing 2,750 was submitted to the insurance company. The loss assessor decided that the car had been undervalued and insured for only 80% of the full value. Calculate: (b) (c) (d) the amount of compensation received by the owner of the car (2 marks) the full value of the car as decided by the loss assessor (2 marks) on the basis of the information provided, the new annual premium required to insure the car at its full value. (2 marks) Company E quotes an annual premium of 630 at an exchange rate of 1 = 1.2. (e) Calculate the premium with Company E in pounds. (2 marks) (Total 12 marks)

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QUESTION 6 A computer was on sale for 1,295 cash or on hire purchase terms. Peter bought the computer on hire purchase terms. The hire purchase terms required a deposit of one-fifth of the cash price and 6 equal monthly instalments. After payment of the deposit, simple interest on the initial balance owing was added at 16% per annum. Calculate: (a) (b) (c) the amount of the deposit (2 marks) the balance owing (1 mark) the total interest charged for the six-month period. (2 marks) Robert says that the total cost to Peter is 1,377.88. (d) Provide a calculation to show if Robert is right or wrong. (2 marks) (e) Calculate the amount of each monthly instalment. (3 marks) At the end of two years, Peter sold the computer for 350. (f) Calculate the average reduction in value of the computer per month. (3 marks) Peter delivered the computer to the new owner. He drove a total of 26 kilometres and charged the new owner 0.25 per kilometre. (g) Calculate how much in total Peter charged for delivery. (2 marks) (Total 15 marks)

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QUESTION 7 Kath, Lucy and Minnie formed a partnership business on 1 January with invested capital of 140,000, 84,000 and 112,000 respectively. (a) Express their investments as a ratio in its simplest terms. (2 marks) For the eight months ended 31 August, Minnie worked for the partnership, and received 1,150 per month after deductions. (b) Calculate the total amount after deductions, Minnie received in salary for the period. (2 marks) After salary and other expenditure, the partnership recorded a profit on 31 August of 16,800. Kath calculated her share of this profit, in proportion to the partners original investments. (c) Carry out Kaths calculation and give the result. (2 marks) (d) State Kaths calculated share of the profit as a percentage per annum of her original investment. (2 marks) On 1 September, each of the partners withdrew from the partnership 12% of their original investment. Calculate: (e) (f) the amount Lucy took out of the partnership (2 marks) the new value of the partnership, after profit and withdrawals. (2 marks) (Total 12 marks)

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QUESTION 8 In the shop on a ferry travelling between Britain and Belgium, items are priced in both pounds sterling and in euros. A particular item is priced at 9 or 11. Friedrich, who has only euros, wishes to know if it would be cheaper to convert some euros to pounds in order to buy the item. He is able to convert euros to pounds at a rate of 1 = 0.80. (a) Convert 11 to pounds sterling at this rate of exchange. (2 marks) (b) Advise Friedrich whether to buy the item in pounds or euros. (1 mark) (c) Explain your answer to (b). (1 mark) Gethin, who has only pounds sterling, wishes to know if it would be cheaper to convert some pounds to euros in order to buy the item. He is able to convert pounds to euros at a rate of 1 = 0.83. (d) Calculate the price in euros of an item costing 9 at this rate of exchange. Give your answer to an appropriate degree of accuracy. (3 marks) Gethin buys the item for 9 and sells it later for 10.35. (e) Calculate the profit percent. (2 marks) (Total 9 marks)

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