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
$ XXXXXXXXXX = $1983.55
XXXXXXXXXXx 19.74% ÷ 100
396.20 ÷ 12 = 32.62 Monthly
1983.55 – 32.62 = $1950.93
3rd Month
XXXXXXXXXX = $2950.93
XXXXXXXXXXx 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
$ XXXXXXXXXX = $ XXXXXXXXXX
XXXXXXXXXXx 12.74%
=25,344.73 ÷ 100
= 253.44 ÷ 12 = $21.1206
= XXXXXXXXXX – XXXXXXXXXX = $ XXXXXXXXXX
3rd Month
$ XXXXXXXXXX = $ XXXXXXXXXX
XXXXXXXXXXx 12.74% = $37,815.66
37,815.66 ÷ 100 = $378.156
378.156 ÷ 12 = 31.513
XXXXXXXXXX – 31.513 = $ XXXXXXXXXX
Suncorp Gold Credit Card
1st Month
$1000
Yearly: 20.50%
250 ÷ 12 = $20.83 Monthly
1000 – 20.83 = $979.17
2nd Month
$ XXXXXXXXXX = $1979.17
XXXXXXXXXXx 20.50%
= 40,572.98 ÷ 100
= $405.729 ÷ 12 = $33.8108
1979.17 – 33.810 = $1945.36
3rd Month
$ XXXXXXXXXX = $2945.36
XXXXXXXXXXx 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 $ XXXXXXXXXXwhilst 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 $ XXXXXXXXXXand the Commonwealth Bank low fee gold Credit Card which had a closing balance of $ XXXXXXXXXXthis 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 $ XXXXXXXXXXwhich incorporates a higher annual fee compared to the Suncorp Standard with a closing balance of $ XXXXXXXXXXwhich incorporates a low rate of annual fee whilst the Common Wealth Bank low fee gold credit card has a stable balance of $ XXXXXXXXXXas 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 bo
owing $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%
) 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
XXXXXXXXXX) – 1
XXXXXXXXXX)
700,000 = M
700,000 = M XXXXXXXXXX)
XXXXXXXXXX,000
XXXXXXXXXX
M
12 x 20 = 240
M = 722,960 ÷ 240
M = $3,012.33
2 | Page XXXXXXXXXXFinancial 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
MS2-12-5Â makes informed decisions about financial situations, including annuities and loan repayments
MS2-12-9Â chooses and uses appropriate technology effectively in a range of contexts, and applies critical thinking to recognise appropriate times and methods for such use
MS2-12-10Â 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.
) 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 bo
owing $ XXXXXXXXXXfor 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
) 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 $ XXXXXXXXXXreducible 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? XXXXXXXXXXmark
What was the total amount of interest saved in comparison to the monthly repayment in part (c)?