Reference no: EM133041667

Question - a) You lend a friend RM30.000, which your friend will repay in 5 equal annual end-ofyear payments of RM10,000, with the first payment to be received 1 year from now. What rate of return does your loan receive?

b) You need to accumulate RM20,000. In order to do so, you plan to make a deposit every year starting today for eight years which pays interest rate of 10% per annum. How much will you need to deposit every year to reach the accumulated deposit of RM20.000?

c) You opened a savings account four years ago and deposited RM200 at that time. Three years ago, you added another RM400 to the account. Last year, you deposited an additional RM100 into this account. The rate of return is 5% compounded annually. How much is in your account today?

d) Humaira must have RM80,000 in order to buy a house. She plans to save RM5.000 per year in her savings account with XYZ Bank that pays 12% interest rate compounded quarterly. How many years will it take if the first saving is made a year from today? Do interpolation.

e) Ainul borrowed RM30.000 in the form of education loan from BB Bank. The payments are to be made in instalment basis at the end of year. The tenure of loan is for 7 years at an interest rate of 8% per annum. Determine the amount that Ainul will have to pay each year for 7 years?

f) A firm is due to receive RM40.000 a year for the next six years and RM60.000 at the end of seventh year. If the discount rate is 8%, determine the present value of the amount to be received?

g) If Harith would like to accumulate RM 10,000 over the five (5) years, how much should Harith deposit each year given 7% annual payment.

h) Distinguish between ordinary annuity and annuity due.

i) Eryna was a student at Universiti Teknologi MARA. She borrowed RM22.000 in student loans at an annual interest rate of 9%. If Eryna repays RM2.500 per year how long will she take to repay the loan? Do interpolation.

j) The expected returns from an investment are as follows: RM20.000 per year for the first eight years, RM40,000 at the end of year 9 and RM10,000 at the end of year 10. If the interest rate is at 14%, what is the future value of the cash flows at the end of year eleven?