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Question 19N.3.HL.TZ0.c

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Date November 2019 Marks available [Maximum mark: 2] Reference code 19N.3.HL.TZ0.c
Level HL Paper 3 Time zone TZ0
Command term Calculate Question number c Adapted from N/A
c.
[Maximum mark: 2]
19N.3.HL.TZ0.c

In the country of Gardia, the currency is the gamma. The exchange rate of the United States dollar (US$) to the gamma is US$ 1 = 6.20 gamma.

Gardia received a loan of US$ 4 million from a foreign bank in 2018 when the exchange rate was US$ 1 = 5.3 gamma. It must pay back US$ 4.2 million (original amount borrowed plus interest) in 2019 when the exchange rate is US$ 1 = 6.2 gamma.

Calculate the additional cost of paying back the loan in gamma in 2019, due to the interest and the change in the exchange rate.

[2]

Markscheme

2018: 4 × 5.3 = 21.2
2019: 4.2 × 6.2 = 26.04

Any valid working is sufficient for [1].

26.04 − 21.2
= 4.84 million gamma or 4.84 million

An answer of 4.84 million or 4.84 or 4.84 million gamma without workings is sufficient for [1].

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