Basic principles in financial decisions

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The concept of financial mathematics is one of the basic principles in financial decisions.

(a) Explain the differences between compounding and discounting by providing appropriate examples.

(b) Azrul has decided to save RM1,000 which he received as a birthday gift in a savings account paying 5% annual interest. How much will it accumulate in Azrul's account in six years' time?

(c) Qusairy borrowed RM80,000 to buy a car. His loan cost was 8% and he promised to repay the loan in 15 equal annual payments. How much is the total principal outstanding after the first loan payment?

Reference no: EM133110394

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