Applications of Finance (AQA Level 3 Mathematical Studies (Core Maths): Paper 1: Data, Finance, Estimation & Modelling): Exam Questions

• When Carly started work she had a student loan of £12 000

• She started work on January 1st 2014 with an annual salary of £17 000

• She has to make repayments to the Student Loan Company.

• Each year she has to repay 9% of everything she earns in excess of £16 365

• To model her annual repayments, Carly assumed that her salary would increase by £1500 each year.

• She set up a simple spreadsheet as shown below.

Write a formula for cell C4

Simple interest at 2% is added to Carly’s outstanding loan at the start of every year.

So, after the first year, the outstanding debt is:

£12 000 + interest of £240 – repayment of £57.15

Work out when Carly would first owe less than her original student loan of £12 000

Complete the bank statement.

Ruth is going on holiday to South Korea.

She needs some South Korean currency, which is the South Korean Won (₩).

Exchange rate £1 = ₩1510

Work out how many South Korean Won she can buy with £840

Answer ₩____________________

When she returns, she must pay the bank a 3% commission to exchange her money back into UK pounds (£).

The exchange rate her bank uses is £1 = ₩1680

She returns with ₩359520

How much in UK pounds will she receive after commission?

Chris took out new life insurance at the start of 2021

The cost of the life insurance in 2021 was £35 per month.

Each year the cost of the life insurance increases by the rate of inflation in December of the previous year.

In 2022 the cost increased by the December 2021 rate of inflation of 5.4% Choose the monthly cost for 2022

Chris wants to estimate how much the monthly cost will be in 2024

In December 2022 the rate of inflation was 10.5%

It is estimated that the rate of inflation in December 2023 will be about half the rate of inflation in December 2022

Estimate the monthly cost of the insurance in 2024

Give your answer to the nearest pound.

Use Income Tax and National Insurance 2023–2024 in the Preliminary Material.

Keisha currently has an annual net salary Of £35302.40

Keisha is promoted at work.

Her new annual gross salary will be £63000

     Tax and National Insurance are deducted from her salary.      She has the standard personal allowance of £12570

Keisha wants to buy a new car, which will cost her £825 per month.
She says,

      “The increase in my net monthly salary will be more than the monthly payment for the car.”

Is she correct?
You must show your working.

Sally is planning a holiday in Canada.

On 1 May 2020, Sally invested £2000 in this savings account.

On 1 May 2023, she closed the account and used all the money to buy Canadian dollars.

The exchange rate was £1 = 1.68 Canadian dollars

Did Sally get more than 3500 Canadian dollars?
You must show your working.

During the holiday, Sally bought a handbag for 190 Canadian dollars.

She paid with her bank debit card.

The bank

    added a fee of 2.5% of the cost of the handbag

    used an exchange rate of £1 = 1.75 Canadian dollars.

Work out the total amount, in pounds, that Sally had to pay

Use Income Tax and National Insurance 2022–2023 from the Preliminary Material.

Julian has an annual salary of £58000

He pays income tax and National Insurance but has no other deductions.

Budget advice is to spend a maximum of 30% of your net income on rent.

Julian spends £1000 per month of his net income on rent.

He says,

“This fits within the budget advice.”

Is he correct?

You must show your working.

Peter took out a mortgage for £150 000 at the end of December 2021

The annual interest is 3.6%, charged monthly.

His monthly payment is £920

At the end of each month, the interest is added then the payment is deducted.

The spreadsheet shows some information about the amount he still owes at the end of each month

Complete the spreadsheet.

Give each value to the nearest penny.

Work out the total amount of interest that Peter pays in the first six months

Peter wants to know what percentage of his original mortgage he has still to pay after these six months.

Choose the spreadsheet formula he can use to work this out.

Use Income Tax and National Insurance 2021–2022 in the Preliminary Material.

John has a gross income of £49 000 per year.

8% of his gross income is deducted and paid into his company pension.
He pays Income Tax and National Insurance, but has no further deductions.
He has the standard personal allowance.

The pension amount is deducted before Income Tax and National Insurance are calculated.

John wants to move to a new flat, which will cost £1050 per month to rent.

He says,

“I will only be able to afford the rent if it is less than of my net monthly income.”

Can John afford the rent?
You must show your working.

The chart shows information about the change in the UK Retail Price Index (RPI) between January 1987 and December 2020.

A food item cost £1.90 in January 1987

Use the chart to estimate the cost of this food item in September 1995

An electrical item cost £129 in December 2020

Use the chart to estimate the cost of this item in July 2006
You must show your working.

Use Income Tax and National Insurance 2020–2021 from the Preliminary Material.

Anna has an annual salary of £116 000

She has a reduced personal allowance as her salary is over £100 000

Work out her personal allowance.

Answer £________________

Carlos has an annual salary of £165 000

He pays income tax and National Insurance but has no other deductions.

He says,

“I pay more than of my salary in income tax and National Insurance.”

Is he correct?
You must show your working.

Use Student loans from the Preliminary Material.

Andrew started university in September 2015 and took out a student loan.

He graduated from university in July 2018 and started work with an annual salary of £18 000

He receives a pay rise of 5% every January and an inflationary increase of 2% every April.

The spreadsheet shows some information about his salary.

Choose the formula that gives the correct value for cell C4

Complete the spreadsheet.

Give each value correct to the nearest penny.

In which month and year will Andrew have to start paying back his student loan?

Work out Andrew’s first month’s student loan repayment.

Use Income Tax and National Insurance 2018–2019 from the Preliminary Material.

Mike is an engineer.
His salary is £42 500 per year.
He pays income tax and National Insurance but has no other deductions. His net pay is £2690.07 per month.

Mike wants to buy a new house but can’t afford the mortgage payments.

He says,
“If my net pay increased by £270 per month I could afford the mortgage payments.”

Mike is promoted to supervisor.
His salary increases by £5250 per year.

Can he now afford the mortgage payments?
You must show your working?

Use Income Tax and National Insurance 2017–2018 in the Preliminary Material.

Vikki is thinking about returning to work after having a baby.

Her employer offers her a contract for three days a week with a gross salary of £15 800 per year.
She will have to pay for nursery and travelling costs for each of the three days.

Nursery £32 per day
Travel £7 per day

Vikki will have four weeks’ holiday each year.
She will have no nursery or travel costs in these weeks.

She pays income tax and National Insurance but has no other deductions. She has a personal tax allowance of £11 500

Vikki works out her average monthly net pay after paying the nursery and travel costs.

She says,
“I will still have more than £700 per month left of my net pay.”

Is she correct?
You must show your working.