Tutorial 7
1. A debt of RM 8,000 will mature in four years’ time. Find
a) the present value of this debt,
b) the value of this debt at the end of two years,
c) the value of this debt at the end of five years,
assuming money is worth 9% compounded quarterly.
2. Find the future value and the interest earned for each of the following annuities.
a) RM 6,000 every year for 8 years at 12% compounded annually.
b) RM 800 every month for 2 years 5 months at 5% compounded monthly
c) RM 950 every 3 months for 3 years 9 months at 6% compounded quarterly.
d) RM 2,450 every 2 months for 1 year 8 months at 6% compounded every 2
months
e) RM 90 every day for 150 days at 10% compounded daily. (Use Banker’s
Rule)
3. RM 100 is deposited every 3 months for 2 years and 9 months at 8% compounded
quarterly. What is the future value of this annuity at the end of the investment
period? How much interest is earned?
4. Find the present value for each of the following annuities.
a) RM 6,000 every year for 8 years at 12% compounded annually.
b) RM 800 every month for 2 years 5 months at 5% compounded monthly
c) RM 950 every 3 months for 3 years 9 months at 6% compounded quarterly.
d) RM 2,450 every 2 months for 1 year 8 months at 6% compounded every 2
months.
5. James intends to give a scholarship worth RM 5,000 every year for six years. How
much must he deposit now into an account that pays 7% per annum to provide the
scholarship?
Prepared by HSJ
Answers:
1.
a) The present value of this debt = RM 5,603.73
b) The value of this debt at the end of two years = RM 6,695.51
c) The value of this debt at the end of five years = RM 8,744.67
2.
a) RM 73,798.16, RM 25798.16
b) RM 24,605.49, RM 1405.49
c) RM 15,848.03, RM 1598.03
d) RM 25,632.42, RM 1,132.42
e) RM 13,783.24, RM 283.24
3. S = RM 1,216.87
Interest earned, I = RM 116.87
4.
a) RM 29,805.84
b) RM 21,810.41
c) RM 12,676.07
d) RM 23,204.70
5. A = RM 23,832.70
Prepared by HSJ
