Tasmanian School of Business and Economics

BEA$140-$ Data Analysis for Business, ASP $2-2023$

TUTORIAL $2$

This tutorial includes questions that pertain to the concepts and topics covered in week

$2.$ To further enhance your understanding, selected practical solutions will be discussed

during the workshop in week $3.$

Question $1$ A person$$s $$140,000$ life assurance benefit is to be invested at j$4=9\%$ p$.$a$.$

with quarterly payments of $$5,000,$ beginning immediately, made to the surviving spouse

for life. On the payment date immediately following the spouse$$s death, the remainder is

to be gifted to the Salvation Army. If the spouse lives for a further five years and eight

months, what does the Salvation Army receive?

Question $2$ After receiving an allowance for a trade$-$in$,$ a car buyer owes $$17,500$ on a

new car, and agrees to settle the debt under a hire purchase contract whereby he will

make equal monthly payments for three and a half years. A flat rate interest charge

$($terms charges$)$ of $9\mathrm{.}5\%$ p$.$a$.$ is imposed.

$($a$)$ Find the rates j$12$ and j$1$ being charged.

$($b$)$ What is the outstanding principal immediately after the $38$th payment?

Question $3($Example $15)$ We borrow $$2000$ at j$12=15\%$ p$.$a$.$ to buy a new stereo. If

we pay back $$100$ per month, starting at the end of the first month, how long does it

take to pay back the loan, and what is the size of the final partial payment?