Business Mathematics 1 (MGTC2208)
Higher Institute of Commerce and Management (HICM)
Semester: Second Semester
Level: 200
Year: 2018
Instructions: Answer ANY Four questions in this paper. Orderly presentation of results will yield
student full marks.
Q1a)
On the 2
nd
of April 2017, Mr. Sama burrowed 120,000frs from a micro financial institution at the rate of
12.8% per annum. What extra charge has he burn on the 25
th
of September 2017 when he paid the money?
(5marks)
Q1b)
An investment of 100,000frs at the rate of 5% per annum was carried out by a student in a Credit Union for
10 years. What amount was added to the principal when withdrawing the money by the student 10 years
after investment? (5marks)
Q1c)
A newly recruited lecturer of the University of Bamenda invests 100,000frs on the 1
st
of January each year at
4% per annum. What amount would have this lecturer invested at the end of the three years? (10 marks)
Total…………………………………………………………………………………………….[20marks]
Q2a)
Calculate the values of the following sums compounded as indicated below;
i. 80,000frs compounded at 15 percent 6 times a year for one year.
ii. 9,000frs compounded at 9 percent 12 times in 1 year for 1 year.
iii. 21,000frs compounded at 10 percent 20 times in 1 year for 4 years.
iv. 150,000frs compounded 6 times in 1 year for 12 years at an annual interest rate of 12 percent ( 2
marks each, total 10 marks)
v. 30,000frs compounded for 10 years in a bank with an annual rate of interest of 3.75 percent. The
bank pays interest every month.
Q2b)
After how long will a principal of 8,000frs grow to 10,000frs if invested at 10 percent annual interest rate
when:
i. Compounding is done quarterly.
ii. Compounding is done continuously.
[10 marks]
Q3a)
Find the present value of a perpetual dividend of 450,000frs at an annual interest rate of 15 percent.
(5marks)
Q3b)
Given two investment projects A and B, project A involving an initial outlay of 83,000frs promises to yield a
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:20/07/2018 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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stream of net revenues of 650,000frs for 10 years at an annual rate of interest of 15 percent. Project B
involves an initial outlay of 55,000frs and promises to yield a stream of net revenue of 110,000frs for 10
years at an annual interest rate of 15 percent.
i. Are these investment projects economically feasible/profitable? And,
ii. Which one of the two projects is more profitable? (15 marks)
Total……………………………………………………………………………………………….20 marks
Q4a)
Given the market demand function qd = 8 – 1/2p where p and qd ≠ 0.
a) Find the quantity demanded if the price is 12frs.
b) Find the price if the quantity demanded is 50 units.
c) What will the demand be if the production were a free good?
d) What is the highest price a consumer will pay for its commodity?
e) If the price of the product is increased by 80frs, what will happen to the quantity demanded? (4
marks each).
Total………………………………………………………………………………………………20 marks
Q5)
A perfect competitive firm sells at price 9frs, a unit of the product. It has a production function given as
Q = 12 – 2/L – 4/K. He pays wages (w) = 2frs and interest (r) = 4frs.
a) Determine the units of labour and capital that the firm should employ to maximize profit;
b) Determine the output level;
c) Determine the profit if any.
(20 marks)
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