# Commercial Arithmetic 2 Video Questions and Answers

Commercial Arithmetic 2 Video Questions and Answers.

In this session, we are going to solve several questions on appreciation and depreciation, hire purchase as well as simple and compound interest.

Lessons (**35**) * SHARE*

- 1.
A farmer bought a machine at sh.110, 000. If the depreciation rate is 15% per annum, Calculate
(a).The value of the machine after 3 years
(b).The number of years it will take for the value to depreciate to sh.55 ,000.

5m 52s - 2.
A salesman sold a new motor cycle at sh.24,000.The depreciation rate was 5% per annum .What was the value of
the motor cycle after 3 years?

1m 28s - 3.
A merchant bought a car for sh.40,000.Its depreciation rate is estimated at 10% per annum of its value at the beginning of each year. What will be value of the car at the end of four years

0m 17s - 4.
A plot of land was valued at sh.50,000 at the start of 1994.It appreciated by 20% during 1994.Thereafter,Every year,it appreciated by 10% of its previous year’s value.Find:
(a)the value of the land at the start of of 1995
(b)the value of the land at the end of 1997

2m 34s - 5.
The cost of minibus was sh.950,000.It depreciated in value by 5% per year for the first two years and by 15% per year for the subsequent years.
(a)Calculate the value of the minibus after 5 years
(b)After 5 years the minibus was sold through a dealer at 25% more than its value to Mr x.If the dealer’s sale price was to be taken as its value after depreciation,calculate the average monthly rate of

7m 34s - 6.
The average rate of depreciation in a value of water pump is 9% per annum. After three complete years its value was sh.150,700. Find its value at the start of the three year period.

2m 30s - 7.
A water pump cost ksh 21,600 when new.At the end of the first year its value depreciated by 25%.The depreciation at the end of the second year is 20% and thereafter the rate of depreciation is 15% yearly. Calculate the exact value of the water pump at the end of the fourth year.

3m 19s - 8.
A businessman obtained a loan of sh 450,000 from a bank to buy a matatu valued at the same amount.The bank charges interest at 24% per annum compounded quarterly.
(a)calculate total amount of money the businessman paid to clear the loan in 21/2years.
(b)The average income realized from the matatu per day was sh 150.The matatu worked for 3 years at an average of 280 days per year.Calculate the t

5m 29s - 9.
Omollo bought a new car for ksh.800,000.After 5 years,he sold it through a second hand car dealer.The dealer charged a commission of 4 % for the sale of the car.If omollo received ksh.480,000.Calculate the annual rate of depreciation of the car as a percentage.

3m 54s - 10.
Halima deposited ksh 109,375 in a financial institution which paid simple interest at the rate of 8% p.a. At the end of 2 years ,she withdrew all the money .she then invested the money in shares.The value of shares depreciated at 4% p.a.during the first year of investment .In the next 3 years ,the value of the shares appreciated at the rate 6% every four months
(a)Calculate the amount Halima

7m 4s - 11.
At the beginning of the year 1998,Kanyingi bought two houses ,one in Thika and the other in one in Nairobi ,each at ksh 1,240,000.The value of the house in Thika appreciated at the rate of 12% p.a.
(a)Calculate the value of the house in Thika after 9 years,to the nearest shilling
(b)After n years ,the value of the house in Thika was ksh 2,741,245 while the value of the house in Nairobi was

7m 42s - 12.
Muga bought a plot of land for ksh 280,000.After 4 years ,the value of the plot was ksh 495,000.Determine the rate of appreciation ,per annum ,correct to one decimal place.

2m 46s - 13.
Mbaka bought some plots at ksh 400,000 each.The value of each plot appreciated at the rate of 10% per annum.
1.Calculate the value of a plot after 2 years
2.After some time t,the value of the plot was ksh558,400.Find t ,to the nearest month
3.Mbaka sold all the land he had bought after 4 years for ksh.2,298,200.Find the percentage profit Mbaka made ,correct to 2 decimal places.

6m 23s - 14.
If a cupboard is to be bought on a hire purchase, the buyer pays a deposit equal to 10% of the cash price plus 12 equal monthly installment. John bought the cupboard by hire purchase and ended up by paying a total of sh.3,240,which was 20% above the cost price.Determine the monthly installment.

2m 46s - 15.
The cash price of a television set is sh.25,000.A customer paid a deposit of sh.3750.He repaid the amount owing in 24 equal monthly installments.If he was charged simple interest at the rate of 40% p.a,how much was each installment?

2m 36s - 16.
The cash price of a T.V.set is ksh13, 800.A customer opts to buy the set on hire purchase terms by paying a deposit of ksh 2280.If simple interest of 20% p.a .is charged on the balance and the customer is required to repay by 24 equal monthly installments ,calculate the amount of each installment.

0m 0s - 17.
The cash price of a laptop was ksh 60,000.On hire purchase terms ,a deposit of ksh 7500 was paid followed by 11 monthly installments of ksh 6000 each.
(a)calculate;(i)The cost of a laptop on hire purchase terms (ii)The percentage increase of hire purchase price compared to cash price .
(b)An institution was offered a 5% discount when purchasing 25 such laptops on cash terms .Calculate the am

7m 21s - 18.
The hire purchase (H.P.) price of a public address system was ksh276000.A deposit of ksh 60000 was paid followed by 18 equal monthly installments. The cash price of the public address system was 10% less than the H.P. price.
(a)Calculate (i) the monthly installment
(ii)the cash price
(b)A customer decided to buy the system in cash and allowed a 5% discount on the cash price .He took a bank lo

6m 50s - 19.
In a retail shop,the marked price of a cooker was ksh 36,000.Wamandi bought the cooker on hire purchase terms .She paid ksh 6400 as a deposit followed by 20 equal monthly installments of ksh 1750.
(a)Calculate:
(i)the total amount of money she paid for the cooker .
(ii)the extra amount of money she paid above the marked price .
(b)The total amount of money paid on hire purchase terms was

7m 37s - 20.
Omondi deposited sh.4, 500 in a bank which paid compound interest of 12% per annum.Calculate the amount after two years.

1m 1s - 21.
An insurance company has a target of raising sh.100,000 in a period of three years .At the beginning of each year the company invests sh.30,000 at a compound interest of 15% in a financial institution.By how much does the company exceed its target at the end of three years?

1m 11s - 22.
Find the compound interest on sh.21,000 in 5 years at 15% p.a.

1m 11s - 23.
Pauline deposited sh.1, 500 in a savings account at the beginning of the year. Compound interest on the money is calculated at the rate of 15% per annum.At the beginning of the subsequent year she deposited sh.1,500 in the same amount .Calculate the amount of money she will have in her account at the end of 5th year.

1m 53s - 24.
A businesswoman withdrew sh.67,845 from a financial institution which included both the principal and compound interest which accrued with 3 years .If the compound interest rate was 25% per annum,Calculate the principal.

1m 59s - 25.
At the beginning of every year, a man deposited sh.10,000 in a financial institution which paid compound interest at a rate of 20% p.a. He stopped further deposits after 3 years .The money remained invested in the financial for a further 8 years. (a)How much money did he have at the end of the first three years?
(b)How much interest did the money generate in the entire period?

3m 51s - 26.
Mr Ngeny borrowed sh.560,000 from a bank to buy a piece of land .He was required to repay the loan with simple interest for a period of 48 months .The repayment amounted to sh.21,000 per month. Calculate (a) The interest paid to the bank. (b) The rate per annum of the simple interest

3m 4s - 27.
A financial institution charges compound interest on money borrowed .A business woman borrowed sh.16,000 from a financial institution .She paid back sh.25,000 after 2 years .Find the interest rate per annum

1m 56s - 28.
A businesswoman opened an account by depositing sh.12,000 in a bank on 1st July 1995.Each subsequent year ,she deposited the same amount on 1st July.The bank offered her 9% per annum compound interest .Calculate the total amount in her account on (a)30th June 1996 (b)30th June 1997

2m 34s - 29.
A tailor intends to buy a sewing machine which costs ksh48,000.She borrowed the money from a bank .The loan has to repaid at the end of the second year.The bank charges an interest at the rate of 24% per annum compound half- yearly.Calculate the total amount payable to the bank.

1m 45s - 30.
A house is to be sold either on a cash basis or through a loan .The cash price is sh.750,000.The loan condition are as follows :there is to be a down payment of 10% of the cash price and the rest of the money is to be paid through a loan at 10% per annum compound interest. A customer decided to buy the house through a loan .
(a)(i)Calculate the amount of money loaned to the customer

5m 57s - 31.
A bank either pays simple interest at 5% p.a. or a compound interest at 5% p.a.on deposits. Nekesa deposited sh p in the bank for two years on simple interest terms.If she had deposited the same amount for two years on compound interest terms,she would have earned sh 210 more .Calculate ,without
using mathematical tables ,the value of

3m 18s - 32.
A certain sum of money is deposited in a bank that pays simple interest at a certain rate .After 3 years the total amount of money in the account is sh 358,400.The interest earned each year is sh12,800.
(a)Calculate:
(i)the amount of money which was deposited
(ii)the annual rate of interest that the bank paid.
(b)A computer whose marked price is sh 40,000 is sold at sh 56,000 on hire purchase

7m 1s - 33.
When ksh 40,000 was invested in a certain bank for 5 years it earned a simple interest of ksh 3,800.Find the amount that must have been invested in the same bank at the same rate for 71 2 years to earn a simple interest of Ksh 3420.

2m 41s - 34.
Kago deposited ksh 30,000 in a financial institution that paid simple interest at the rate of 12% per annum. Nekesa deposited the same amount of money as Kago in another financial institution that paid compound interest .After 5 years ,they had equal amount of money the financial
institutions.Determine the compound interest rate per annum ,to 1 decimal place,for Nekesa deposit.

3m 58s - 35.
Asia invested some money in a financial institution. The financial institution offered 6% per annum compound interest in the first year and 7% per annum in the second year. At the end of the second year, Asia had ksh 170,130 in the financial institution.Determine the amount of money Asia invested.

2m 32s

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