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 THAT HAS PASSED THE END DATE:

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	6
REGISTRATION STATUS		REGISTRATION START DATE	REGISTRATION END DATE	SAQA DECISION NUMBER
Passed the End Date - Status was "Reregistered"		2018-07-01	2023-06-30	SAQA 06120/18
LAST DATE FOR ENROLMENT		LAST DATE FOR ACHIEVEMENT
2026-06-30		2029-06-30

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	Passed the End Date - Status was "Reregistered"	2023-06-30	BANKSETA
Elective	49021	Further Education and Training Certificate: Debt Recovery	Level 4	NQF Level 04	Passed the End Date - Status was "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.	AAR Trading and Projects (Pty) Ltd
2.	Advanced Assessments and Training (Pty) Ltd
3.	Africa Glory Empowerment Services
4.	Assured Vocational Skills Institute (Pty) Ltd
5.	Brainwave Project 707 Pty Ltd
6.	Brainwave Projects 707
7.	DC Academy
8.	Delmas Development Centre
9.	Fachs Business Consulting and Training
10.	Gigimo Tourism Academy
11.	MAT 007 (PTY) LTD
12.	Matibidi Raphela Investments (Pty) LTD
13.	Octomate Education Pty Ltd
14.	Octopus Training Solutions
15.	Production Management Institute of Southern Africa (Pty) Ltd
16.	RIAPHATHUTSHEDZA
17.	Riskworx Academy Pty Ltd
18.	SIGNA ACADEMY (PTY) LTD
19.	Sinovuyolethu Trading (Pty) Ltd
20.	THE SHERQ CENTRE OF EXCELLENCE PTY LTD