This checkpoint assesses your understanding of GST, best buys, payment plans, BNPL and simple interest. Calculators allowed. Show all working for short answer questions.
Multiple Choice
1. What is the rate of GST in Australia?
2. Which of the following is a fixed expense?
3. A blender has a GST-exclusive price of $80. What is the GST-inclusive price?
4. A TV costs $1,200 cash. On hire purchase, the total cost is $1,440. How much extra does the buyer pay?
5. A $200 BNPL purchase is split into 4 payments. How much is each payment?
6. Calculate the simple interest on $5,000 at 4% p.a. for 3 years.
7. $3,000 is invested at 6% p.a. simple interest for 8 months. What is the interest earned?
8. A flat-rate loan of $10,000 at 7% p.a. for 4 years has total interest of:
9. An investment earned $960 interest at 6% p.a. over 4 years. What was the principal?
10. Which payment method typically does not charge interest?
Short Answer
11. A supermarket sells rice in two sizes: 2 kg for $7.20 or 5 kg for $16.00.
(a) Calculate the unit price per kilogram for each size. (2 marks)
(b) Which is the better buy? (1 mark)
3 MARKS
12. A gaming console costs $600 cash. Three purchase options are available:
Option A: Cash payment of $600 today.
Option B: Lay-by with $100 deposit and $25/week for 20 weeks.
Option C: Hire purchase with $0 deposit and $30/week for 24 weeks.
(a) Calculate the total cost of each option. (3 marks)
(b) Which option is cheapest? By how much? (1 mark)
4 MARKS
13. A business borrows $12,000 at 7.5% p.a. simple interest for 18 months.
(a) Calculate the interest charged. (2 marks)
(b) Calculate the total amount to be repaid. (1 mark)
3 MARKS
14. A car dealership advertises: "$18,000 car, finance available at 5% p.a. flat rate, 5 years, only $375/month."
(a) Calculate the total interest paid over 5 years. (2 marks)
(b) Calculate the total amount paid for the car. (1 mark)
(c) Verify the monthly repayment by dividing the total by 60 months. (1 mark)
(d) Explain why this flat-rate loan is more expensive than a reducing-balance loan at the same advertised rate. (1 mark)
5 MARKS
1. B — Australian GST is 10%
2. C — Monthly rent is a fixed expense
3. A — $80 × 1.10 = $88
4. B — $1,440 − $1,200 = $240 extra
5. C — $200 ÷ 4 = $50 per payment
6. D — I = $5,000 × 0.04 × 3 = $600
7. A — n = 8/12 = 2/3. I = $3,000 × 0.06 × (2/3) = $120
8. B — I = $10,000 × 0.07 × 4 = $2,800
9. C — P = $960 ÷ (0.06 × 4) = $960 ÷ 0.24 = $4,000
10. D — Lay-by does not charge interest
11 (3 marks): (a) 2 kg: $7.20 ÷ 2 = $3.60/kg [1]. 5 kg: $16.00 ÷ 5 = $3.20/kg [1]. (b) The 5 kg bag is the better buy [1].
12 (4 marks): (a) Option A: $600 [1]. Option B: $100 + ($25 × 20) = $600 [1]. Option C: $30 × 24 = $720 [1]. (b) Options A and B are both cheapest at $600. Option C is $120 more expensive [1].
13 (3 marks): (a) n = 18/12 = 1.5. I = $12,000 × 0.075 × 1.5 = $1,350 [2]. (b) Total = $12,000 + $1,350 = $13,350 [1].
14 (5 marks): (a) I = $18,000 × 0.05 × 5 = $4,500 [2]. (b) Total = $18,000 + $4,500 = $22,500 [1]. (c) $22,500 ÷ 60 = $375/month [1]. (d) Flat rate calculates interest on the full $18,000 for all 5 years, even as the balance is paid down. A reducing-balance loan would charge less interest over time because the owed amount decreases [1].