SAQA All qualifications and part qualifications registered on the National Qualifications Framework are public property. Thus the only payment that can be made for them is for service and reproduction. It is illegal to sell this material for profit. If the material is reproduced or quoted, the South African Qualifications Authority (SAQA) should be acknowledged as the source.
SOUTH AFRICAN QUALIFICATIONS AUTHORITY 
REGISTERED UNIT STANDARD: 

Calculate Interest using the Basic Mathematics of Interest Rates 
SAQA US ID UNIT STANDARD TITLE
13379  Calculate Interest using the Basic Mathematics of Interest Rates 
ORIGINATOR
SGB Banking and Micro Finance 
PRIMARY OR DELEGATED QUALITY ASSURANCE FUNCTIONARY
BANKSETA - Banking Sector Education and Training Authority 
FIELD SUBFIELD
Field 03 - Business, Commerce and Management Studies Finance, Economics and Accounting 
ABET BAND UNIT STANDARD TYPE PRE-2009 NQF LEVEL NQF LEVEL CREDITS
Undefined  Regular  Level 4  NQF Level 04 
REGISTRATION STATUS REGISTRATION START DATE REGISTRATION END DATE SAQA DECISION NUMBER
Reregistered  2018-07-01  2023-06-30  SAQA 06120/18 
LAST DATE FOR ENROLMENT LAST DATE FOR ACHIEVEMENT
2024-06-30   2027-06-30  

In all of the tables in this document, both the pre-2009 NQF Level and the NQF Level is shown. In the text (purpose statements, qualification rules, etc), any references to NQF Levels are to the pre-2009 levels unless specifically stated otherwise.  

This unit standard does not replace any other unit standard and is not replaced by any other unit standard. 

PURPOSE OF THE UNIT STANDARD 
This unit is for people who are able to process the basic mathematics of interest rates.

The qualifying learner is capable of:
  • Explaining the different types of interest calculations and interest rates
  • Calculating interest rate conversions
  • Applying the time value of money in the valuation of simple instruments
  • Demonstrating an understanding of the terms structure of interest rates used for basic analysis 

  • LEARNING ASSUMED TO BE IN PLACE AND RECOGNITION OF PRIOR LEARNING 
    The learner must be able to work within a treasury or investment environment and to understand the commercial objectives of the operation in which they work. It is essential that learners are competent in mathematics at an NQF level four. 

    UNIT STANDARD RANGE 
    The context of this unit standard is a treasury or investment environment. 

    Specific Outcomes and Assessment Criteria: 

    SPECIFIC OUTCOME 1 
    Explain the different types of interest calculations and interest rates 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    1. The basic features and properties of simple interest and compound interest are explained and applied. 

    ASSESSMENT CRITERION 2 
    2. The different types of nominal interest rate quotations are used to identify effective rates. 

    ASSESSMENT CRITERION 3 
    3. The difference between discount rate and yield is explained. 

    SPECIFIC OUTCOME 2 
    Calculate interest rate conversions 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    1. The equivalent annual effective rate is calculated using the nominal interest rate. 

    ASSESSMENT CRITERION 2 
    2. Interest rates are converted to rates with other compounding periods of the equivalent annual effective rate. 

    ASSESSMENT CRITERION 3 
    3. A discount rate is used to calculate the equivalent yield of an instrument. 

    ASSESSMENT CRITERION 4 
    4. The day-count conventions are applied correctly in different markets. 

    SPECIFIC OUTCOME 3 
    Apply the time value of money in the valuation of simple instruments 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    1. The present and future value of money and the role of interest and time periods in how these are related to each other are explained. 

    ASSESSMENT CRITERION 2 
    2. The future values of single and multiple period investments and their sensitivities are calculated. 

    ASSESSMENT CRITERION 3 
    3. Compound factors and discount factors are correctly differentiated. 

    ASSESSMENT CRITERION 4 
    4. The building block approach and future value formulas are used to estimate future values. 

    ASSESSMENT CRITERION 5 
    5. The present values are calculated using the present value formula. 

    ASSESSMENT CRITERION 6 
    6. The net present value is calculated for an investment with known cash flows. 

    ASSESSMENT CRITERION 7 
    7. The internal rate of return is calculated for an investment with known cash flows. 

    SPECIFIC OUTCOME 4 
    Demonstrate an understanding of the terms structure of interest rates used for basic analysis 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    1. The yield curve is correctly defined. 

    ASSESSMENT CRITERION 2 
    2. Different shapes of the yield curve are identified and discussed in terms of theories of term structure. 

    ASSESSMENT CRITERION 3 
    3. Types of yield curve are defined and their differences discussed. 
    ASSESSMENT CRITERION RANGE 
    Coupon, zero coupon, swap and forward rate curves.
     

    ASSESSMENT CRITERION 4 
    4. Zero-coupon rates are derived from bond yields. 

    ASSESSMENT CRITERION 5 
    5. Forward rates are calculated from spot rates. 


    UNIT STANDARD ACCREDITATION AND MODERATION OPTIONS 
    Accreditation for this Unit Standards shall be from the relevant education and Training Quality Assurer through formative and summative assessment by a registered Assessor. Assessment should be contextual and be conducted in the workplace as far as possible.

    The relevant NSB and SGB should be notified of any feedback related to this qualification.
  • Assessors must be registered as an Assessor with the relevant ETQA
  • Moderators must be registered as assessors with the relevant ETQA
  • Training providers must be accredited by the relevant ETQA
  • Moderation should include both internal and external moderation where applicable
  • The relevant ETQA will co-ordinate all moderation activities in accordance with their policies and procedures 

  • UNIT STANDARD ESSENTIAL EMBEDDED KNOWLEDGE 
    Learners can:

    1. Can identify different types of interest rate calculations
    2. Apply time value of money
    3. Calculate the basic mathematics of interest rates 

    UNIT STANDARD DEVELOPMENTAL OUTCOME 
    N/A 

    UNIT STANDARD LINKAGES 
    N/A 


    Critical Cross-field Outcomes (CCFO): 

    UNIT STANDARD CCFO IDENTIFYING 
    The learner is able to identify and solve problems relating to the completeness, correctness and accuracy of the information received. 

    UNIT STANDARD CCFO COMMUNICATING 
    The learner is able to communicate effectively using basic mathematical and/or language skills in the modes of oral and/or written persuasion when communicating with relevant parties regarding the application. 

    UNIT STANDARD CCFO SCIENCE 
    The learner is able to use science and technology effectively and critically in applying the use of the company system to process applications. 

    UNIT STANDARD ASSESSOR CRITERIA 
    N/A 

    REREGISTRATION HISTORY 
    As per the SAQA Board decision/s at that time, this unit standard was Reregistered in 2012; 2015. 

    UNIT STANDARD NOTES 
    Terminology:

    The learner should be able to define and contextualise the following terms:

    Compound interest Rate, Coupon, Discount Rate and Yield, Forward Rates, Interest Calculations, Discount rate Nominal Interest Rate, Future value, Internal rate of return, Present value, Swap and forward rate curves, Yield Curve, Zero-Coupon Rate.

    Values:

    The use of tasks and materials in the learning event plan should not discriminate against learners on any grounds prescribed in the Bill of Rights and should promote the orientations outlined in the critical cross-field outcomes. 

    QUALIFICATIONS UTILISING THIS UNIT STANDARD: 
      ID QUALIFICATION TITLE PRE-2009 NQF LEVEL NQF LEVEL STATUS END DATE PRIMARY OR DELEGATED QA FUNCTIONARY
    Fundamental  20722   National Diploma: Air Conditioning, Refrigeration and Ventilation  Level 5  Level TBA: Pre-2009 was L5  Passed the End Date -
    Status was "Registered" 
    2004-06-13  MERSETA 
    Elective  20185   Further Education and Training Certificate: Banking  Level 4  NQF Level 04  Reregistered  2023-06-30  BANKSETA 
    Elective  49021   Further Education and Training Certificate: Debt Recovery  Level 4  NQF Level 04  Reregistered  2023-06-30  FASSET 


    PROVIDERS CURRENTLY ACCREDITED TO OFFER THIS UNIT STANDARD: 
    This information shows the current accreditations (i.e. those not past their accreditation end dates), and is the most complete record available to SAQA as of today. Some Primary or Delegated Quality Assurance Functionaries have a lag in their recording systems for provider accreditation, in turn leading to a lag in notifying SAQA of all the providers that they have accredited to offer qualifications and unit standards, as well as any extensions to accreditation end dates. The relevant Primary or Delegated Quality Assurance Functionary should be notified if a record appears to be missing from here.
     
    1. Institute of Business Management 



    All qualifications and part qualifications registered on the National Qualifications Framework are public property. Thus the only payment that can be made for them is for service and reproduction. It is illegal to sell this material for profit. If the material is reproduced or quoted, the South African Qualifications Authority (SAQA) should be acknowledged as the source.