a) Mr. Mwangi repays a loan of Rs3, 250 by paying Rs20 in the first month and then he increased the.

a) Mr. Mwangi repays a loan of Rs3, 250 by paying Rs20 in the first month and then he increased the payment by Rs15 every month. How long did he take to clear the loan.

(4 Marks)

b) Find the amount of annuity consisting of payment of Rs800 at the end of every 3 months for 3 years at the rate of 8% compounded quarterly. (5 Marks)

c) There is a functional relationship between the price P and quantity demanded Q, for a particular commodity denoted by Q = f(P). Assuming f ?P??12?3p, find the quantity demanded at various prices and determine the domain and range of Q?f?P?

(6 Marks)

d) A firm is thinking of buying a machine costing £ 200,000 and the expected net cash flow are

Year	1	2	3	4	5
Net cash flow	50,000	55,000	65,000	75,000	75,000

Using a discount rate of 10% calculate the percentage return over the 5 years on the

original investment. (5 Marks)

QUESTION FOUR (20 MARKS)