Question

JESTION 2 (22 marks) a) Compute the sum to be invested now at 12% compounded monthly so as to accumulate RM8,888 in 3 years, DOES (3 marks b) Compute the interest earned if RM9,600 is invested for 8 years at 8.8% compound quarterly. (5 mar! =) A debt of RM22,000 will mature in 5 years' time. Assuming money is worth 6% compounded semiannually. Calculate, i. the present value of this debt, (3 m ii. the value of this debt at the end of 2 years, (3 m iii. the value of this debt at the end of 4 years. (31 Pag:

Answer 1

The answer for Question a and Question b

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v Page - a) Current investment needed Investment Future value in Present value factor at end of 3 years Future value =Rm8888 Present value LT (t+int pino) Period I (tood 3 years X 12 months L (127.X 12%.xim 12 m ) = to.op) 36 1.6989 = 0.5886 Investment : RM 8888 X0.5886 - RM 5,231

b) Compilation of interest earned 4 Interest Future value - Principal Principal - RM 9600 Future value Pesia - Principal t principals Tt Rate = 9600 + (9600 X- 18*4 +0.022) i Yeau ouerless 9.8.x 3 month 12 month dia = = 9600 +(9600 x 10232) 9600 2 $600 + (9600x0.4984) = 9600+ 4785 Future val= 14385 Interest = 14385 - 9600 3 RD 1785