ASE2003/4/13 Page 1 of 8 Pearson Education Ltd 2013

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Business Calculations

ASE2003

Level 2

Wednesday 20 November 2013

Time allowed: 2 hours 30 minutes



Information

There are 8 questions in this examination.
Total marks available: 100


Instructions

Do not open this paper until you are told to do so by the supervisor.
Answer all questions.
Write your answers in blue or black ink/ballpoint. You can only use pencil for graphs, charts,
diagrams, etc.
Please ensure your answers are written clearly.
Begin your answer to each question on a new page.
All answers must be correctly numbered but need not be in numerical order.
Workings must be shown.
You can use mathematical and statistical tables.
You may use a calculator provided the calculator gives no printout, has no word display facilities,
is silent and cordless. The provision of batteries and their condition is your responsibility.


ASE2003/4/13 Page 2 of 8 Pearson Education Ltd 2013
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Answer all questions

Question 1

A manufacturer borrowed 55,000 at an annual rate of 4% compound interest to be repaid after
2 years.

Calculate:

(a) the amount of interest for each year and the amount owing at the end of each year
(6 marks)

(b) the average amount of interest per annum.
(3 marks)

A businesswoman deposited a sum of money at an annual rate of 3.5% simple interest for 3 years, and
received a total of 1,995 interest.

(c) Calculate how much she deposited.
(3 marks)

The businesswoman deposited a further 22,500, in a separate account, also at simple interest for
3 years. She received annual interest payments of 618.75.

(d) Calculate the annual rate of interest.
(2 marks)

(Total 14 marks)




Question 2

A wholesaler bought a truck to deliver goods to customers. The truck was taxed for 6 months at a cost
of 350 and insurance cover for 12 months cost 1,650.

(a) Calculate based on a proportion of the figures given:

(i) the amount of tax for the first 3 months
(2 marks)
(ii) the amount of insurance for the first 3 months.
(2 marks)

Servicing costs for the first 3 months totalled 570, and depreciation for this period was estimated as
2,500. The total cost of fuel during this period was 3,150.

(b) Calculate the total operating cost for the first 3 months of the trucks use, including servicing,
depreciation, fuel, and an appropriate proportion of tax and insurance.
(2 marks)

During the first 3 months, the truck travelled 11,975 kilometres, using 1 litre of fuel every 5 kilometres.
During the next 3 months, the truck travelled 9,900 kilometres, using 1 litre of fuel every 5 kilometres.
The cost of fuel during the second 3-month period was 2,817.50.

Calculate for the 6-month period:

(c) the cost of tax per kilometre
(3 marks)

(d) the average cost of fuel per litre.
(4 marks)

(Total 13 marks)
ASE2003/4/13 Page 3 of 8 Pearson Education Ltd 2013
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Question 3

Gloria earns an annual salary of 17,160.

Calculate:

(a) the value of Glorias annual salary in dollars, using an exchange rate of $1 = 0.65
(2 marks)

(b) the salary that Gloria earns per week in pounds.
(2 marks)

Gloria earns commission of 2% on the first 7,500 of sales in any month, and 3% on any additional
sales.

In July, Gloria sold goods worth 8,100.

Calculate:

(c) the total commission Gloria earned in July
(4 marks)

(d) Glorias total gross earnings (salary plus commission) in July.
(2 marks)

In August, Gloria earns 204 in commission.

(e) Calculate the value of Glorias total sales in August.
(3 marks)

In August, Gloria worked for 24 days.

(f) Calculate the average commission per day worked that Gloria earned in August.
(2 marks)

(Total 15 marks)
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Question 4

Wholesaler A sells item X at 4.80 per unit.

Retailer B buys 3,500 units of item X.

(a) Calculate the cost of 3,500 units of item X at 4.80 per unit.
(2 marks)

Retailer B receives a trade discount from wholesaler A, and this reduces the amount invoiced.
The invoice total after the trade discount is 16,380.

(b) Calculate the percentage trade discount received.
(3 marks)

Retailer B pays promptly and receives a prompt payment discount of 1.5% of the invoice total.

Calculate:

(c) the amount of the prompt payment discount
(2 marks)

(d) the amount paid.
(2 marks)

After this payment, wholesaler A issues a monthly statement to retailer B.

(e) On the basis of the information given above, state the total of the monthly statement.
(1 mark)

Fourteen units of item X were then found to be faulty and returned.

(f) Calculate the returns as a percentage of the original purchase.
(2 marks)

(Total 12 marks)



ASE2003/4/13 Page 5 of 8 Pearson Education Ltd 2013
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Question 5

Kerry buys a car for 9,000 and converts this to 7,500 for insurance purposes.

(a) Calculate the exchange rate this represents, in euros per one pound.
(2 marks)

Insurance company A offers an annual premium of 630, after allowing a no claims discount of 25%.

(b) Calculate the original annual premium before the discount.
(2 marks)

Kerry wishes to pay in 12 equal monthly instalments and is quoted an additional charge of 10% on the
630 when paying by this method.

(c) Calculate:

(i) the amount of the additional charge
(2 marks)
(ii) the amount of each monthly instalment, to include the premium and additional
charge.
(3 marks)

Kerry chooses insurance company B and pays 56 per month, including a 5% charge for paying by
monthly instalment.

(d) Calculate how much Kerry would have paid for her car insurance for the year if she had not
chosen to pay by monthly instalment.
(3 marks)

(Total 12 marks)


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Question 6

Ju Lian sees a car for sale for 6,930 and agrees to buy it on hire purchase over a period of 3 years.

The hire purchase terms are 20% deposit, plus 36 monthly payments of 200.20 each.

Calculate:

(a) the total amount to be paid by monthly payments
(2 marks)

(b) the amount of the deposit
(2 marks)

(c) the total amount due to be paid for the car
(2 marks)

(d) the additional amount paid when buying on hire purchase
(1 mark)

(e) the additional amount paid as a percentage per annum of the amount borrowed under the
hire purchase agreement. Use a simple interest calculation.
(2 marks)

After 2 years, Ju Lian pays a sum of 1,950 to end the hire purchase agreement early and to own the car
outright.

(f) Calculate the total amount paid by Ju Lian.
(3 marks)

(Total 12 marks)




ASE2003/4/13 Page 7 of 8 Pearson Education Ltd 2013
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Question 7

Amy and Bertrand formed a partnership.

In the first year, they made a profit of 40,000 out of which Bertrand is paid a salary of 25,000.

(a) Calculate Bertrands salary as a percentage of the profit.
(2 marks)

After Bertrands salary is paid, the remaining profit is shared equally between the partners.

(b) Calculate the share of the profit credited to Amy.
(3 marks)

Amy buys shares costing 5.24 each and pays a total of 6,288.

Calculate:

(c) the number of shares Amy purchased
(2 marks)

(d) the total cost of the shares in pounds, at an exchange rate of 1 = 1.31.
(2 marks)

Bertrand buys shares for 3,900, converted to euros as 5,187.

(e) Calculate the exchange rate this represents, in euros per one pound.
(2 marks)

(Total 11 marks)






ASE2003/4/13 Page 8 of 8 Pearson Education Ltd 2013
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Question 8

Xavier and Yollanda form a partnership. They agree to share profits in the same ratio as their level of
investment, which is 2 : 3 (Xavier : Yollanda).

Yollanda invests 42,000.

(a) Calculate:

(i) Xaviers investment
(2 marks)
(ii) the average investment per partner.
(2 marks)

At the end of the first year of trading, Yollanda is credited with 4% interest on her investment.

(b) Calculate the amount of interest credited to Yollanda.
(2 marks)

In the second year of trading, the partners share a profit of 12,400.

(c) Calculate the share of the profit credited to Yollanda.
(3 marks)

Xavier borrows 10,000 from his brother in France, at an exchange rate of 1 = 1.25.

(d) Calculate the amount borrowed in pounds.
(2 marks)

(Total 11 marks)