Math Problem Solver

You have a family consisting of 4 people in total. You have just purchased a new house and you also wish to

buy a new car for your wife. However, your daughter has just started university and you find it extremely

costly to “taxi” her up and down. She also has lessons till 6 or 7 pm at night, and this is further adding to your

cost to travel from work to home, then back to varsity to collect her, and back home again. The only solution

is to get her a second-hand car.

However, with all the existing expenses and the additional vehicles you wish to purchase, you need to

calculate whether you can afford all the additional expenses on top of your existing expenses. The only way is

to add your wife’s nett income to yours to do the calculation.

Your Task

You have to work out the additional expenses, but should anything go wrong, you also need to work out what

the nett value of your house and the new car for your wife is going to be after 5 years. To do all of this you

have to complete 5 exercises, namely:

Personal Finance & Business Stats /85

a. Calculate the monthly instalments on the new car for your wife @ an interest rate of 8%

(compounded) per annum for 60 months. The purchase price is that of R 155 000 and you

have to pay in a 10% deposit.

b. Calculate the depreciation of the new car for your wife over a 5-year period (the nett worth

of the car) @ a depreciation rate of 17% per annum.

c. Calculate the appreciation of your house over a 5-year period (which is your collateral to

the bank) @ an appreciation of 15% per annum. Your purchase price was R 750 000.