1. ARITHMETIC AND INTEREST

2. CALCULATE TO THE NEAREST CENT WHERE NECESSARY THE COMPOUND INTEREST ON (I) €600 FOR 2 YEARS AT 5% Ex. 8A Q.1 (i) Year 1 P 1 = €600 R 1 = 5% A 1 = ? I 1 = ? (600)(1.05) = €630 630 – 600 = €30 Year 2 P 2 = ? R 2 = 5% A 2 = ? I 2 = ? (630)(1.05) = €661.50 661.50 – 630 = €31.50 Compound Interest = 661.50 – 600 = €61.50 €630

3. CALCULATE TO THE NEAREST CENT WHERE NECESSARY THE COMPOUND INTEREST ON (II) €1800 FOR 2 YEARS AT 9% Year 1 P 1 = €1800 R 1 = 9% A 1 = ? (1800)(1.09) = €1962 Year 2 P 2 = ? R 2 = 9% A 2 = ? (1962)(1.09) = €2138.58 Compound Interest = 2138.58 - 1800 = €338.58 €1962

4. A 3 = ? A 2 = ? CALCULATE TO THE NEAREST CENT WHERE NECESSARY THE COMPOUND INTEREST ON (III) €3500 FOR 3 YEARS AT 7½% Ex. 8A Q.1 (iii) P = €3500 R = 7½ % A 1 = ? (3500)(1.075) = €3762.50 Compound Interest = 4348.04 - 3500 = €848.04 (3762.50)(1.075) = €4044.69 (4044.69)(1.075) = €4348.04

5. A 3 = ? A 2 = ? CALCULATE TO THE NEAREST CENT WHERE NECESSARY THE COMPOUND INTEREST ON (III) €7800 FOR 3 YEARS AT 3½% Ex. 8A Q.1 (iv) P = €7800 R = 3½ % A 1 = ? (7800)(1.035) = €8073 Compound Interest = 8648 – 7800 = €848 (8073)(1.035) = €8355.56 (8355.56)(1.035) = €8648.00

6. €4600 WAS INVESTED FOR 2 YEARS AT COMPOUND INTEREST. IF THE RATE FOR THE FIRST YEAR WAS 6% AND FOR THE SECOND YEAR WAS 9%, FIND THE TOTAL INTEREST FOR THE TWO YEARS. Ex. 8A Q.2 Year 1 P 1 = €4600 R 1 = 6% A 1 = ? (4600)(1.06) = €4876 Year 2 P 2 = ? R 2 = 9% A 2 = ? (4876)(1.09) = €5314.84 Compound Interest = 5314.84 – 4600 = €714.84 €4876

7. A COMPANY BORROWED €12000 FROM A BANK AT 11% PER ANNUM, COMPOUND INTEREST. THE COMPANY REPAID €5000 AT THE END OF THE FIRST YEAR. HOW MUCH WAS OWED TO THE BANK AT THE END OF THE SECOND YEAR. Ex. 8A Q.3 Year 1 P 1 = €12000 R 1 = 11% A 1 = ? (12000)(1.11) = €13320 Year 2 P 2 = ? R 2 = 11% A 2 = ? (8320)(1.11) = €9235.20 ANS: Amount owed = €9235.20 13320 – 5000 = €8320

8. €2500 WAS INVESTED IN A BUILDING SOCIETY. IF IT AMOUNTED TO €2612.50 AFTER ONE YEAR CALCULATE THE RATE OF INTEREST? Ex. 8A Q.4 P = €2500 R = ? A = €2612.50 A/P = 2612.5/2500 = 1.045 4½%Interest rate =

9. A SUM OF MONEY IS INVESTED AT 7% P.A. IF IT AMOUNTS TO €6848 AFTER ONE YEAR FIND THE SUM INVESTED? Ex. 8A Q.5 P = ? R = 7% A = €6848 €6848 is 107% ANS: P = €6400 6848/107 = €64 is 1% (64)(100) = €6400 is 100% A = 107% P = 100%

10. Tax payable = Gross Tax – Tax credits INCOME TAX

11. INCOME TAX QUESTIONS CAN BE DONE BY FILLING IN THE FOLLOWING TABLE Gross Pay Tax Band 1 Tax band 2 Gross Tax Less Tax Credits Tax Payable Net Pay

12. Gross Pay Tax Band 1: Tax Band 2: Gross Tax Less Tax Credits Tax Payable Net Pay