QUESTION 1

Bertus has surplus income of R200 000 per annum. He wants to invest this in a high risk fund that will grow at a rate of 14% per annum. He will increase the instalments by 5% per annum and the investment is for a period of 20 years. After 20 years the value of his investment will be:

	a.	R28 095 150.89
	b.	R25 877 112.42
	c.	R27 194 272.54
	d.	R29 347 186.94
	e.	None of the above

QUESTION 2

Albertus invested the following amounts in a unit trust fund at the beginning of every year for a period of 7 years. Take note that in Year 4 he withdrew an amount from the fund rather than make an investment. At the end of the seventh year he cashed the investment in and received an amount of R215 832. Calculate the internal rate of return (IRR) that he earned on his investment.

Year
1	R11 200
2	R6 300
3	R21 400
4	(R2 800)
5	R14 500
6	R26 000
7	R32 200
	a.	20.58%
	b.	21.18%
	c.	21.43%
	d.	20.87%
	e.	None of the above

QUESTION 3

Leonard needs R100 000 in five years time. He plans to start his investment with an amount of R10 000 and then increase the annual instalments by a fixed percentage. He will earn interest of 10.25% pa. Calculate the percentage by which he has to increase his instalments every year.

	a.	-9.32
	b.	-0.85
	c.	9.32
	d.	0.85
	e.	none of the above

QUESTION 4

Mike invested an amount of R2 800 000 in a fund with a growth rate of 7.3% per annum. He will take withdrawals equal to 8% of the capital at the beginning of every year. The term for which the investment will continue until there is no longer any money in the fund, is:

	a.	12.99 years
	b.	11.98 years
	c.	12.06 years
	d.	11.44 years
	e.	None of the above

QUESTION 5

Sheldon invested in a pure endowment policy 15 years ago. The policy has now matured and the maturity value is R4 200 000. The policy is open-ended and she has decided to leave her money in the fund and make annual withdrawals of R240 000 at the beginning of every year for a period of 8 years. The growth rate of the fund is 9.2% per annum. Calculate the value of the policy after the eight (8) year term.

	a.	R11 403 765.50
	b.	R5 826 312.72
	c.	R5 581 032.77
	d.	R11 158 485.55
	e.	None of the above

QUESTION 6

Jarred retires today. He needs post retirement income of R420 000 per annum for a period of 35 years. His income must increase by 8% per annum and he can invest his capital at a rate of 9.5%. The amount of capital that he needs on his retirement date is:

	a.	R15 370 965.20
	b.	R11 740 490.10
	c.	R11 579 660.20
	d.	R15 751 268.91
	e.	None of the above

QUESTION 7

Walter has surplus income of R92 000 per annum. He wants to invest this in a fund that will grow at a rate of 12% per annum. He will increase the instalments by 3.5% per annum and the investment is for a period of 17 years. After 17 years the value of his investment will be:

	a.	R8 271 236.23
	b.	R3 425 528.61
	c.	R5 681 107.59
	d.	R6 147 674.22
	e.	None of the above

QUESTION 8

Garfield died on 1 February 2023. A life insurance policy paid out an amount of R2 500 000 as a death benefit. His son, the beneficiary of the policy will receive level monthly payments. The first payment is on 1 April 2023. The monthly payment that the beneficiary will receive if interest is earned at 13% and the beneficiary is to receive payments for a period of 10 years, is:

	a.	R37 327.69
	b.	R35 274.39
	c.	R36 927.64
	d.	R38 795.41
	e.	None of the above

QUESTION 9

Dan has just retired. He wants to set aside a lump sum amount that will enable him to buy a new car in 5 years time. The current cost of the car is R500 000. The cost of the car will increase by 6.5% per annum and the amount that he invests will grow at 8.5% per annum. The amount that he must invest today to be able to buy the car in 5 years time, is:

	a.	R455 584.93
	b.	R685 043.33
	c.	R401 325.98
	d.	R682 078.66
	e.	None of the above

QUESTION 10

Nici has an amount of R1 200 000 that she wants to invest for a five-year term in a fixed interest rate investment. She can invest the amount in a term deposit with Beta Bank Ltd. It is for a term of 5 years and interest accrues semi-annually. The nominal rate of interest is 10.25%. The effective rate of interest is:

	a.	9.83%
	b.	9.35%
	c.	9.68%
	d.	9.51%
	e.	None of the above