SERIES 4 EXAMINATION 2006

BUSINESS CALCULATIONS
LEVEL 2 (Code No: 2003) FRIDAY 17 NOVEMBER __________

Instructions to Candidates (a) The time allowed for this examination is 2 hours 30 minutes. (b) Answer all 8 questions. (c) The marks available are indicated at the end of each question. (d) Your answers should be written in blue or black ink/ballpoint. graphs, charts, diagrams, etc. Pencil may be used only for

(e) All answers must be clearly and correctly numbered but need not be in numerical order. If no working is shown, a correct answer may receive full marks but an incorrect answer will receive no marks. Candidates are therefore advised to indicate how they arrive at their answers. (f) All calculations, where applicable, must be shown on the answer paper provided.

(g) The use of mathematical and statistical tables is allowed. (h) Candidates must pay due regard to good figures, accuracy and neatness in their work. (i) Candidates may use calculators provided the calculators give no printout, have no word display facilities, are silent and cordless. The provision of batteries and responsibility for their condition must rest with the candidate.

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Answer all questions QUESTION 1 Cecille deposits 20,000 for 3 years at compound interest of 5.5% per annum. (a) Calculating year on year, calculate the total of compound interest earned after 3 years (6 marks) In a different account Cecille deposits 15,000 for 8 years at compound interest of 4.2% per annum. (b) Using the compound interest formula, calculate the total interest earned after 8 years. Give your answer to the nearest penny (5 marks)

(Total 11 marks)

QUESTION 2 A retailers total sales in a year were 252,000. The cost price of goods sold was 166,000. During the year the following overheads were paid: Wages Heat, light, telephone Rent Office expenses Calculate: (a) gross profit (b) net profit (c) the net profit as a percentage of the total sales The wages were paid to five staff who worked a total of 2,654 hours. (d) Calculate the average payment per hour (e) Calculate the average number of hours worked per member of staff (2 marks) (2 marks) (2 marks) (3 marks) (2 marks) 17,251 4,180 9,700 6,989

(Total 11 marks)

2003/4/06

QUESTION 3 (a) Three employees, Farooq, Geraint and Hussain, receive their pay in three different ways. Farooq receives a flat-rate salary of 20,566 per annum. Geraint receives a wage of 210 per week, plus 1% commission on sales. Hussain receives a standard rate of 6.80 per hour.

In a particular week: Geraint sells goods to the value of 17,400; Hussain works 38 hours at standard rate, plus 5 hours overtime paid at one-and-a-quarter times standard rate. Calculate how much each of the three employees received for that week. (8 marks) (b) There are 150 employees in a company. Their annual leave entitlements are given in the following table:

Category A Category B Category C Category D

Number of Days Leave per Year 20 22 23 25

Number of Employees 38 33 52 27 150

Calculate the average (mean) number of days leave per employee (c) Two companies issued shares in their businesses Company X issued 50,000 shares at 7.60 each (i) Calculate how much was raised by the share issue

(4 marks)

(2 marks)

Company Y issued shares in America at $4.40 each and raised $506,000 (ii) Calculate the number of shares issued (2 marks)

(Total 16 marks)

2003/4/06

OVER

QUESTION 4 Stefan orders packs of screws as follows: 100 economy packs 50 standard packs 25 premium packs at at at 4.00 each 6.70 each 9.59 each (3 marks)

(a) Calculate the total cost of the order, before any discount (b) Calculate the average cost to Stefan of one pack of screws, before any discount

(3 marks) A cash discount of 12% is offered for prompt payment. (c) Calculate the payment made after deduction of the cash discount (3 marks)

Anya also ordered packs of screws at the above prices. She ordered economy, standard and premium packs and ordered the same number of each type of pack. (d) Calculate the average cost to Anya of one pack of screws, before any discount Erica ordered 175 packs of nails at a cost of 18.90 per 5 packs (e) Calculate the cost to Erica before any discount (2 marks) (3 marks)

(Total 14 marks)

2003/4/06

QUESTION 5 An insurance company charges the following annual premiums for property insurance: Buildings 15 per 10,000 insured Contents 1.45 per 1,000 insured

(a) A property owner wishes to insure a building valued at 210,000 and contents valued at 35,400 Calculate the annual cost to the householder of insuring: (i) (ii) the building the contents (2 marks) (2 marks)

(b) A second owner pays a total annual premium of 420 in 12 equal monthly instalments A service fee of 4% of the total annual premium is charged when payment of the premium is made by 12 equal monthly instalments. The service fee is also paid in equal monthly instalments. Calculate, for the second owner: (i) (ii) the amount of the service fee for the year the amount of each monthly payment including premium and service fee (2 marks) (3 marks)

For budgeting purposes, the second owner wishes to know how much of her weekly income is needed for this insurance. Calculate: (iii) the cost of premium plus service fee per week (2 marks)

(Total 11 marks)

2003/4/06

OVER

QUESTION 6 Jess travelled to America to visit her brother. She changed 600 into dollars at a rate of exchange of 1 = $1.765. (a) How much did she receive in dollars? (2 marks)

She spent $817.10 during her stay. She decided to return via France, and converted her remaining dollars into euros at a rate of 1 = $1.18. (b) How much did she receive in euros? On leaving France, she had 25 remaining (c) How much in euros, did she spend in France? (1 mark) (3 marks)

On returning to Britain, Jess decided to keep a one euro coin for her collection, and converted the rest to pounds sterling at 1 = 1.50. (d) How much in pounds sterling () did she receive? While in France, Jess bought goods weighing a total of 1.98 kilograms. (e) How much do these goods weigh in pounds? Use the conversion 1 lb = 0.45 kg (2 marks) (3 marks)

(Total 11 marks)

2003/4/06

QUESTION 7 The same make of sofa is available in two different stores. Dwayne wished to buy one on hire purchase. Store A sells the sofa at a cash price of 1,800 or on hire purchase terms. The hire purchase terms require a cash deposit of one-fifth of the cash price and 24 equal monthly instalments. The hire purchase loan is the amount outstanding after payment of the deposit. (a) Calculate the hire purchase loan (3 marks)

Simple interest is charged at 9% per annum. The total interest is added to the loan before calculation of monthly instalments. (b) Calculate: (i) (ii) (iii) the total simple interest added the cost of each monthly instalment the total cost of the sofa if bought on hire purchase (2 marks) (3 marks) (2 marks)

Store B sells the sofa on hire purchase for a deposit of 350 and 12 monthly instalments of 137.55 each. (c) (i) (ii) Calculate the total cost of the sofa if brought on hire purchase at store B Give a reason why Dwayne might choose to purchase the sofa on hire purchase from store A (1 mark) (Total 13 marks) (2 marks)

QUESTION 8 Mrs Begum, Mrs Ivanov and Mrs Prince formed a partnership business on 1 April with invested capital of 200,000, 275,000 and 150,000 respectively. (a) Express their investments as a ratio in the simplest terms The profit for the nine months ended 31 December was 47,500. (b) Express the profit as a percentage of the total investment (3 marks) (2 marks)

For this period, each partner received interest on her original capital of 6% per annum. In addition Mrs Begum received a salary of 560 per month. (c) Calculate (i) (ii) (iii) How much interest was received for this nine month period by Mrs Ivanov The total of interest and salary received during this period by Mrs Begum The profit remaining after payment to the partners of interest and salary (2 marks) (3 marks) (3 marks)

(Total 13 marks)

2003/4/06

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