Course NotesPracticePast Paper Archive

Finance · Guided Practice

Saving and Borrowing

11 questions with answers and video solutions. Try each one before revealing the answer.

1
£1200\displaystyle \pounds 1200 is invested for 1\displaystyle 1 year at 4%\displaystyle 4\% simple interest.
Calculate the interest earned.
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2
£2500\displaystyle \pounds 2500 is invested for 2\displaystyle 2 years at 3%\displaystyle 3\% simple interest per year.
Calculate the total interest earned.
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3
Cara takes out a loan of £3600\displaystyle \pounds 3600.
The interest plus the administration fee is 9%\displaystyle 9\% of the loan amount.
The total is repaid in 12\displaystyle 12 equal monthly payments.
Calculate her monthly payment.
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4
A sofa has a cash price of £1050\displaystyle \pounds 1050.
It can also be bought with a deposit of £150\displaystyle \pounds 150 followed by 24\displaystyle 24 monthly payments of £38.50\displaystyle \pounds 38.50.
Calculate how much more the payment plan costs than the cash price.
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5
£5000\displaystyle \pounds 5000 is invested in an account paying 2.8%\displaystyle 2.8\% compound interest per year.
Calculate the value of the investment after 3\displaystyle 3 years.
Give your answer to the nearest pound.
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6
Marek buys 300\displaystyle 300 shares at £2.40\displaystyle \pounds 2.40 each.
He later sells 200\displaystyle 200 of them at £3.10\displaystyle \pounds 3.10 each and the remaining 100\displaystyle 100 at £1.95\displaystyle \pounds 1.95 each.
Calculate his overall profit or loss.
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7
2019 P1 Q2(b)
3 Marks

Paul is buying a new TV.

It is advertised at a price of £825.

He decides to use a payment plan to buy the TV.

The total cost of the TV using the payment plan is £845.80.

The payments are calculated as follows:

  • deposit of 15\displaystyle \frac{1}{5} of advertised price
  • 8 equal monthly instalments
  • final payment of £100.

(b) Calculate the monthly instalment.

8
2019 P1 Q5
3 Marks

Allana takes out a loan of £4500.

The interest plus the administration fee is 7.5% of the loan amount.

The total amount will be paid back in 9 equal monthly payments.

Calculate the monthly payment.

9
2021 P2 Q1
4 Marks

Omar has £3000 which he will invest for 3 years. He is considering two options.

Savings accountStocks and shares ISA
Interest rate of 2.5% per annum3 year investment
guaranteed £80 interest for every £1000 invested

Determine which option will have the greater value after 3 years. Use your working to justify your answer.

10
2023 P2 Q8(b)
3 Marks

Eileen wants to buy a new dining table from the shop.

It is advertised at a price of £800.

Eileen wishes to use a payment plan to buy the dining table.

The total price of the payment plan is 14% more than the advertised price.
The payments are calculated as follows:

  • the deposit is 14\displaystyle \frac{1}{4} of the total price
  • 10 equal monthly instalments
  • followed by a final payment of £100.

(b) Calculate the cost of each monthly instalment.

11
2024 P2 Q8(d)
3 Marks

(d) The advertised price for a deluxe bathroom is £6700.
It can be bought using a payment plan.
The payment plan is £325 more expensive than the advertised price.
The payment plan consists of:
• a deposit of 12.5% of the advertised price
• 50 equal monthly instalments.

Calculate the monthly instalment.

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