Scribd
Upload
343 views

Part 1

Shahida won first prize in a contest and was given the choice between receiving RM 150,000 immediately or a BMW 3 Series car worth RM 180,000 in 2 years. Using a future value formula, the value of the BMW in 2 years with an 8% annual interest rate was calculated to be RM 209,952. Therefore, the summary recommends that Shahida choose the BMW since its future value is higher. A second summary problem involves calculating the present value amount that would need to be deposited in an account with a 5.5% annual interest rate to grow to RM250 in 5 years. Using a future value formula, the present value is calculated to be RM191, rounded to the nearest RM1.

Uploaded by

wawan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
343 views

Part 1

Shahida won first prize in a contest and was given the choice between receiving RM 150,000 immediately or a BMW 3 Series car worth RM 180,000 in 2 years. Using a future value formula, the value of the BMW in 2 years with an 8% annual interest rate was calculated to be RM 209,952. Therefore, the summary recommends that Shahida choose the BMW since its future value is higher. A second summary problem involves calculating the present value amount that would need to be deposited in an account with a 5.5% annual interest rate to grow to RM250 in 5 years. Using a future value formula, the present value is calculated to be RM191, rounded to the nearest RM1.

Uploaded by

wawan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 1

4.

shahida just receive a call from Petronas whereby she is announced as the 1 prize
winner for Petronas Drive and Win Contest. The contest organizer has given her two
choices whether to receive a sum of RM 150,000 immerdiately or to have a BMW 3
series car in 2years time. The current prices of the car is RM 180,000 and it is expected
to be the same in the next 2 years. If the interest rate is 8% annually, which option
should Shahida take?

i n× t
FV (BMW) = PV [1+ () n
]

i 1×2
= 180 000 [1+ ()
n
]

= 209 952

Answer: Shahida should take BMW because FV BMW is higher.

5. How much money must be put into a bank account Yeilding 5.5% (compound
annualy) in order to have RM 250 at the end of five years (round to nearest RM1)?

i n× t
FV = PV [1+
n ()
]

0.055 1 × 5
250 = PV [1+ ( 1 )
]

250 = PV (1.307)

250
= PV
1.307

PV = 191.28

Answer: RM 191

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy