A draft paper is shown in the attached link. You have 5 minutes to do the 8 questions, no calculator is allowed and as it is multiple choice with only two alternatives the mass mark is 62% - as by the law of averages guessing should give you a 50% score.
(the timescale and no calculator is my suggestion as it is so simple..)
tinyurl.com/b47sgub
I only scored 88% and took 3 minutes.
(I imagine real candidates get hours and a calculator.)
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My mental arithmetic's not as good as your madf, I'd need a calculator.
But not difficult.
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His mental arithmetic isn't very good either. It's just fast.
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Question 8 says 'Account 1 pays 3.1% on a monthly basis' The answer given is only correct if what they meant was 'Account 1 pays 3.1% PER ANNUM on a monthly basis ......
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I passed only 63 percent done in less than five minutes.I'm lousy at maths.No calculator.
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I am not 100% accurate at mental arithmetic done at speed But shortcuts - ignore the decimals - enable you to get an approximate answer in seconds. You just then look at the two alternatives.. And hey presto,
It's dumbed down finance written by people who are incapable of doing artithmetic quickly and easily so the questions seem difficult to those setting them Or they are thick . Or they make it easy by setting the wrong answer miles away from teh correct one so any approximation shows which is correct.
One poster on the Guardian ? Independent ? accused me of being a banker when I ridiculed the exam. He shut up when I replied (truthfully ) I was an OAP....
Which shows how dumb and prejudiced many of their readers are: present company excepted of course...:-)
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I assumed you were meant to be able to approximate by rounding which I would always do as a check even when I want a precise answer. The questions seemed to facilitate this, e.g. Q4 where the capital divided neatly by 8 making the interest amount easy to estimate.
I don't think the questions were written by a dummy. They're reasonably straightforward for people who can do sums, but that's the point? Even so, most people IME won't be able to do the interest ones. You admit to close acquaintance with compound interest calculations which makes you unusual.
I got the calculator out for (1+0.031/12)^12-1 = 3.144% (MM, you only need ^12 to compare annual rates, but I can't do that in my head) so I disqualified myself from your test :-(
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>>I assumed you were meant to be able to approximate by rounding which I would always do as a check even when I want a precise answer.
Someone else brought up with a slide rule?
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>> Someone else brought up with a slide rule?
British Thornton!
www.bbc.co.uk/ahistoryoftheworld/objects/0NqOjhQUTb6EfGTtof5_eQ
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>> >>I assumed you were meant to be able to approximate by rounding which I would
>> always do as a check even when I want a precise answer.
>>
>> Someone else brought up with a slide rule?
>>
I'm afraid I'm one of those sad people who regards any technical person who tells me they can't use a slide rule with an innate mistrust..... Almost certainly a sign of my age, neither of my sons would have a clue on how to use log tables.....
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>> I assumed you were meant to be able to approximate by rounding which I would
>> always do as a check even when I want a precise answer.
>>
Something I taught my children from an esrly age.
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madf if you can actually do calculations to the power of 24 in your head then I'm impressed!
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Q.3 Leonie has £1,750 to invest for 4 years and can choose between 2 different savings accounts. Account 1 pays 3.7% simple interest paid out at the end of each year. Account 2 pays 3.4% compound interest paid at the end of the period. Which account would give Leonie more interest over the 4 year period?
I think this question is rubbish. For the compound interest account claims only to pay the interest at the end of the four years... which surely means there's nothing to compound.
Whereas the simple interest account is actually paying the money - and if the money is paid into the account (rather than to a different account) then the calculation will actually compound!!
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>> Q.3 Leonie has £1,750 to invest for 4 years and can choose between 2 different
>> savings accounts. Account 1 pays 3.7% simple interest paid out at the end of each
>> year. Account 2 pays 3.4% compound interest paid at the end of the period. Which
>> account would give Leonie more interest over the 4 year period?
>>
>>
>> I think this question is rubbish. For the compound interest account claims only to pay
>> the interest at the end of the four years... which surely means there's nothing to
>> compound.
>>
>> Whereas the simple interest account is actually paying the money - and if the money
>> is paid into the account (rather than to a different account) then the calculation will
>> actually compound!!
>>
Yes
I got that one wrong..
Written by a non mathematician/someone who did not understand what they were saying..
in other words a dumb examiner
Which kind of proves my point.
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>> Written by a non mathematician/someone who did not understand what they were saying..
>> in other words a dumb examiner
>>
>> Which kind of proves my point.
>>
I don't see how you can work out that they cannot speak?
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You don't need to do compound interest to solve the answers.. (I got one wrong because my approximations are wrong)..
Basically 10% compound takes roughly 9 years to double.
3% compound takes roughly 27 years
and so on..
(I used to know these off the top of my head as anyone doing compound interest who looks at them with any insight will find after 20 minutes playing with the numbers)
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I did it all my head but I'm rather slow these days ( except when driving ;-) ) so took 8 minutes and ended up guessing a few.
Scored 88%
Surely it only takes just over 7 years to double at 10% compound.
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7 years, 3 months and a bit.
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"Surely it only takes just over 7 years to double at 10% compound"
Blimey, that sparked something from a long time back in my brain - "rule of 72"??? Divide the rate of interest into 72 and it will tell you how long it takes to double? eg pop of the world increasing by 2% a year will double in 36 years.......I think ;-)
No, that's depressing - my savings will double (in £s) by about 2153 but by then they will have halved in value 6x and I will be 203 years old! Better get spending!!
Last edited by: PhilW on Fri 8 Feb 13 at 18:29
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I still have a slide rule in original case.
And a 1973 hand held Texas Instruments "pocket" calculator - battery powered.. (not working alas)
And a 1982 HP 11C financial calculator.. which I still use.. - dates, DCFs etc... I have to re-read the manual though as it's quite complex -
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I have an HP12C, and another in case I lose it!
Probably the only calculator still in production after 30 years.
www.hpmuseum.org/hp12c.htm
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I was bought up with log tables and a slide rule.
I cannot for the life of me think why I would prefer to use either these days.
Which is not so say that I regret learning to be able to difficult sums without a calculator, I think everybody should learn that.
But log tables were an awful way of achieving an answer and only existed because accessible calculators didn't. They taught nothing about mathematical process, in fact simplified the process.
And slide rules? Why?
Now if you prefer to use sch things, good luck to you. But they are both inferior to a calculator. And if I was worried about my calculator breaking down, then I would carry two.
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I once thought that it was a good idea to introduce finance onto the school curriculum, but now I realise that if everyone were taught to control their spending, then the economy would grind to a halt even without bankers' greed. In order for people to make money, they need someone to take it from i.e. the less financially astute.
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Is a load of crap it is just purely a tiny sample of the full qualification. While it is probably a good idea to study it in schools but lets not get on the high horse that any of us could pass just like that.
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>> but lets not get on the high horse that any of us could pass just like that.
'spect I could. its only GCSE level.
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>> >> but lets not get on the high horse that any of us could pass
>> just like that.
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>> 'spect I could. its only GCSE level.
>>
I passed a sociology exam at University - for a bet - with zero work, no attendance at lectures and no reading . It was multiple choice questions. I got 61%.
I won £5 - big money then equivalent to about £50 now.
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What I meant was there will be a lot more work that just that, I bet I could pass it too but it won't be a case of doing a 5 minute multiple choice test to get the GCSE.
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>>lets not get on the high horse that any of us could pass just like that.
>>What I meant was there will be a lot more work that just that,
What I meant was that without work, revision, preparation or discussion I could pass that GCSE Finance exam.
And I mean the full exam, not a 5 minute multiple choice test.
For an encore I would drive home with a door mirror missing and without dying or killing.
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My mirror was dangling down, if I drove it at the time I would have had a dented wing/door.
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Don't be a fool as well as a wimp Chris.
"And I am not risking driving without a drivers mirror, in mad city traffic it would be madness."
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>> But log tables were an awful way of achieving an answer and only existed because
>> accessible calculators didn't. They taught nothing about mathematical process, in fact simplified the process.
The upside of learning about logarithms and the theory behind them was that it made life easier a bit later in life when I had to work in Decibels, the amount of younger people who struggle now to understand that 3.01Db is double the power of 0Db and some of the blank looks when you tell them that, put simply, its a ratio of the power expressed in terms of 10Log10. Must admit rarely use the theory these days, too many measuring sets that just give green=good red=fail.......
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>>Must admit rarely use the theory these days, too many measuring sets that just give green=good red=fail.......
Kids don't seem to understand just how much understanding the process can help you in normal life, rather than just getting the answer when you have a calculator handy.
Mind you, when I was 15 I never understood the teacher insisting I "showed my working out" as well as giving the right answer.
Having said that, I don't think I have ever found log tables useful for anything other than passing an exam, and as far as I am aware, I have never reapplied the approach.
In fact, the only thing I ever found impressive about log tables is the fact that someone one invented them and they worked. Its all very well understanding them, but Napier & Briggs made the damn things up from scratch. Quite clearly smarter than I'll ever be by an order of some considerable magnitude.
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Had a maths teacher in the fifties in Plymouth - a good teacher too - who pronounced the word logarithms 'lograthims'. Odd how one remembers these things.
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Pass your GCSE in finance. - Bromptonaut
