Higher November 2018 Paper 2 Q4
4 Northern Bank has two types of account.
Both accounts pay compound interest.
| Cash savings account Interest 2.5% per annum | Shares account Interest 3.5% per annum |
Ali invests £2000 in the cash savings account.
Ben invests £1600 in the shares account.
You must show all your working. (4)
In the 3rd year the rate of interest for the shares account is changed to 4% per annum.
Give a reason for your answer. (1)
| Answer | Mark | Mark scheme |
|---|---|---|
| Ben (supported) | P1 | shows how to work interest out for one year eg \(2000 \times 0.025\ (= 50)\) or \(1600 \times 0.035\ (= 56)\) or 150 or 168 or \(2000 \times 1.025\ (= 2050)\) or \(1600 \times 1.035\ (= 1656)\) |
| P1 | shows compound interest calculation for one account eg \(2050 \rightarrow 51.25\) or \(2101.25 \rightarrow 52.53\) or \(1656 \rightarrow 57.96\) or \(1713.96 \rightarrow 59.99\) eg \(2000 \times 1.025^3\ (= 2153.78)\) or \(1600 \times 1.035^3\ (= 1773.95)\) | |
| P1 | shows complete compound interest calculation for both accounts eg \(2000 \times 1.025^3\ (= 2153.78)\) and \(1600 \times 1.035^3\ (= 1773.95)\) OR one interest stated correctly eg 153.78 or 173.95 | |
| C1 | Ben (shares) supported by 153.78 and 173.95 |
Additional guidance
Throughout accept figures ±1 pence which do not need to be presented in money notation (to 2dp) or with monetary symbols.
Award mark for a correct process shown, for which these figures can be taken as implying the process.
As above, award mark for both correct processes shown for both accounts, which these figures can be taken as implying the process.
Accept an answer of “shares”.
| Answer | Mark | Mark scheme |
|---|---|---|
| conclusion | C1 | conclusion (ft) eg no change, shares now 182.5… Acceptable examples no since shares/Ben now 182.5 Still Ben since 182.5 > Ali No; he only gets 8.57 more No; he gets 68.56 instead of 59.98 (3rd yr) No; Ben already gets more interest, he would just get even more Not acceptable examples no shares now 182.5 Still Ben since less than Ali 182.5 > 153.78 no; he needs 20.17 more |
Additional guidance
Conclusion needs to be supported.
ft is from part (a); calculations carried out as part of (b) need to be correct for the comparison to be valid.