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Depreciation and Loans

We estimate MS1-12-DL is worth about 10 marks out of 100 under the new Mathematics Standard 1 syllabus. Practise 12 exam-style questions (multiple choice, multi-part, numerical answer, short answer) with instant marking and a worked solution for every question.

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Topic notes

Straight-line and declining-balance depreciation, comparing the two methods, reducing-balance loans modelled in a table, the effect of extra or more frequent repayments, credit card interest compounded daily, fees, minimum payments, and choosing between a credit card and a personal loan.

  1. 1What you need to know
  2. 2Depreciation
  3. 3Loans
  4. 4Credit cards
  5. 5Common mistakes
  6. 6Exam tips
  7. 7Links to other topics
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Example questions

Example 1 · 1 mark · multiple choice

A machine costs $48 000 and depreciates by $5500 each year using the straight-line method. What is its salvage value after 6 years?

  1. A$15 000
  2. B$20 500
  3. C$33 000
  4. D$42 500

Example 2 · 1 mark · multiple choice

A car bought for $36 000 depreciates at 18% p.a. using the declining-balance method. What is its value after 4 years?

  1. A$69 796.00
  2. B$16 276.38
  3. C$19 849.25
  4. D$10 080.00

Example 3 · 1 mark · multiple choice

A credit card charges interest of 19.99% p.a., compounded daily, from the date of purchase. Lily buys a laptop for $2400 on the card and pays the full amount 25 days later. How much interest is charged? (Use 365 days in a year.)

  1. A$39.98
  2. B$33.08
  3. C$2433.08
  4. D$32.86

Answers and worked solutions appear when you practise these questions.

Other Mathematics Standard 1 topics