Sally Lomes has a current account and a deposit account at a commercial bank. Part of a bank statement for her current account is shown in Fig. 3. [Figure 3]

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2011). The mark or mark type is shown in brackets.

1. [1] (a)(i) One mark for overdrawn/overdraft.
2. [2] (a)(ii) Any two features × 1 mark each:
3. • (method of payment) used for regular/irregular payments
4. • that may vary in amount
5. • money requested by the creditor/payee
6. • enables computerisation of the transaction/electronic transactions.
7. Any other relevant point.
8. NB do not give credit for fixed amounts.
9. [4] (a)(iii) Nov 18 $360 debit balance $415 CR (1)
10. $30 credit balance $445 CR (1)
11. $825 debit balance $380 OD (1)
12. Nov 19 $380 + $100 = $480 to be withdrawn from deposit account (1)
13. OR Total debits are $360 + $825 = $1185 (1)
14. Total credits are $775 + $30 = $805 (1)
15. $1185 - $805 = $380 OD (1)
16. Nov 19 $380 OD + $100 = $480 to be withdrawn from deposit account (1).
17. OFR applies. If the correct answer is given without working, award full marks.
18. [4] (b) Any four points × 1 mark each (with at least one mark scored for each account):
19. Current account – used for daily transactions, to pay bills, to withdraw money, method of payment (1 mark max), used as access to other services, one example such as overdraft, advice.
20. Deposit account – savings account, earns interest, used for surplus cash.
21. Any other relevant point.
22. [3] (c) Any three points × 1 mark each:
23. cash
24. statement
25. loan quotation
26. order cheque book
27. balance of account
28. transfer of funds between accounts
29. top up mobile
30. pay in cash/cheques
31. change PIN number
32. order bank statement
33. pay bills
34. Any other relevant service.
35. [6] (d) Level 2 (4-6 marks)
36. Candidate has presented a reasoned argument about whether or not Sally and William should pay the same premium for house insurance.
37. It is possible that Sally and William should pay the same premium for insurance because they live in the same area and are neighbours, so presumably they live in the same kind of house and they also insure with the same insurance company.
38. However, there may be several reasons why William pays more for his house insurance than Sally. He may live in a bigger house with more bedrooms. He may have recently improved the house so that it is worth more and so he wants to insure it for a greater value. He may recently have made a claim and so is thought to be at greater risk of making a claim than Sally. He may have declared (under the principle of utmost good faith) that he keeps dangerous materials in the house and the insurance company thinks that this increases the risk and so the premium is increased. His house may be made of more inflammable materials (e.g. thatch roof) and statistics show that these houses may be more likely to burn, hence the higher premium. It is also possible that there has been an error. Sally may not be paying the right premium or William is paying too much!
39. Level 1 (1-3 marks)
40. Candidate has suggested one or more reasons for the difference in premiums.
41. William is more of a risk than Sally. William lives in a larger house. William's house is worth more.