Business Mathematics 1 (MGTC2208)
Higher Institute of Commerce and Management (HICM)
Semester: Second Semester
Level: 200
Year: 2015
Instructions: Answer question Two (2) and any two others.
Q1. a) Find the values of the following sums compounded as stated below:
i. 500,000Frs is compounded at 12 percent, 5 times a year, for 5 years. (5mks)
ii. 120,000Frs compounded at 10 percent, 20 times a year, for 10 years. (5 mks)
b) An amount of 50,000frs is invested in an account earning an interest of 4 percent per annum. Find
the total amount in the account:
i. After 5 years if interest is compounded continuously. (5mks)
ii. After 10 years if compounding is done continuously. (5mks)
Q2. Assuming a purely perfect competitive market with the following demand and supply functions
Qd = 200 – 5p; Qs = 4p – 70; where Qd, Qs and P ≠ 0.
a. Derive the equilibrium price and quantity. (3mks)
b. What are the expectations if the government imposes a maximum price of 25Fcfa? (3mks)
c. What are the expectations if the government imposes a minimum price of 35Fcfa? (3mks)
d. What is the effect on equilibrium price and quantities if the government imposes a specific tax of
9Fcfa on the supply of the good. (5mks)
e. How is the tax shared between the product and the consumers of the products?
f. What amount of revenue could be generated by the government? (3mks)
g. If instead of a tax, the government guarantees the subsidies of 9Fcfa, how much in total would be
spent by the government? (5mks)
h. How would the subsidy be shared between the products and the consumers of the goods? (3mks)
Q3. a) A man burrows 60,000Fcfa from a corporation at 3 percent per annum interest. He pays
20,000Fcfa at the end of each year. How much does he still owe after the second repayment? (5mks)
b) A new investment project of 5 million Fcfa is put in hand. The marginal propensity to consume is
4/5. That is, 4/5 of all extra income is spent and the balance being saved.
i. By how much is the total income received in the period increased? (5mks)
ii. By how much is the total income received in 15 years increased? (5 mks)
c) Find the limit of the function:
f(x) =
𝑥
3
+8
𝑋+2
as x approaches -2 (5mks)
Q4. A trader uses q units of goods at price p = 400 – 0.02q. The total cost of producing q units is
C = 100q + 1000. How many items should the trader sell in order to maximize profit, what price
should be changed to maximize profit and what is the maximizing profit? (20 mks)
SCHOOL/FACULTY: H.I.C.M DEPARTMENT: ALL
COURSE CODE: COURSE TITLE: Business Mathematics 1
SEMESTER: Second NATURE: Exam LEVEL:
LECTURER: Prof. Njimanted G. DATE: HALL: DURATION: 3hours
REPUBLIC OF CAMEROON
Peace -Work – Fatherland
UNIVERSITY OF BAMENDA
P.O BOX 39 BAMENDA
TEL: 33 36 36 94
REPUBLIQUE DU CAMEROUN
Paix -Travail – Patrie
UNIVERSITE DE BAMENDA
P.O BOX 39 BAMENDA
TEL: 33 36 36 94
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