Assessment Brief

You work as a junior accountant for Metro Ltd. Your line manager has been pleased with your work and is looking to assign you more responsibilities. He has asked you to complete a series of tasks to test what you can do.

Task 1

a)

i) Reno Ltd invests £150,000 at 2.5% compound interest for three years. What will be the value of the investment after three years?

ii) Mukesh Ltd has received £65,661 after investing for 6 years at an annual interest rate of 6.5%. What was the original amount they invested?

iii) Alpha Ltd invests £45,000 and after 9 years it has received £62,300. The interest rate the bank applied to the deposit changed each year. Using the geometric mean method, calculate the average annual interest rate.

b) Link Bank is deciding whether to grant a loan application to a new customer. As part of the analysis, calculate the percentage change for each of the headline numbers on the table below.

c) The government has released the latest retail price index which suggests inflation was 1.62%. A typical basket of food at the supermarket this week costs £52.67. Calculate the cost of that typical basket:

i) a year ago

ii) one month ago (assuming inflation occurs evenly throughout the year)

Final-MBF-Summative-data-for-students