# Pv rm ²³³³³³ interest rate µ v rm ³³³³³³

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PV% RM ²³³³³³ Interest rate% ´µ )V% RM ¶³³³³³³ NUM%(R O) P(RIO'S%" \$NSW(R" ¶·¸¹º years¸

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¹±Ben plans to place Rm³µ²¶¶¶ in a ﬁxed deposit account with an interest rate of º´ a year±The FD pays interest every quarter and the amount is re»deposited to earn interest±He wants to know how much money is available after ·¶ years± PV% RM ¹·³³³ I»Y% ²µ Number of period% ¶³ x ² %²³ \$NSW(R% RM¶¶¶´´²¸¹
³±Ahmad requires RM 8¶²¶¶¶ in µ years’time±He has placed his funds in a vehicle that generates an annual compounded rate of ³±³µ´±How much must he invest in a lump sum now? )V%RM ³¼³³³ n%· i%¹¸¹·µ %y using ﬁnancial calculator and get the PV% RM ··³ ¶¸±º \$ns" +e must invest total RM··³ ¶¸±º now¸

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¼ There are ° investment plans X and Y±Plan X involves setting aside RMµ¶¶ at the beginning of every quarter for ·¶ years±Plan Y requires an amount of RM°µ¶ at the beginning of each quarter for °¶ years±If the rate of return is !9´ a year compounded quarterly²which plan provides a high future value? 2PCR : P»Y%² PMT% RM·³³ n%¶³½²%²³ i%!µ %y using ﬁnancial calculator and get the )V% RMº±¼´¶³¸´ 2PCR ; P»Y%² PMT% RM±·³ n%±³½²% ³ i%!µ %y using ﬁnancial calculator and get the )V% RM·´¼³¶¶¸!º Ans": Plan Y is providing a higher future value which is RM¹»²¸µµ´!9º

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Q·¶±Assume that you plan to buy a condominium µ years from now²and you estimate that you can save RM°²µ¶¶ per year±You plan to deposit the money into the bank that pays º´ interest²and you will make the ﬁrst deposit at the beginning of each year±How much will you have after µ years? PMT% RM±¼·³³ i% ²µ n% · )V% " ¶¸ ±N' ¾! PMT ¾! ±N' ¾! (NT(R ¿change to %eginning modeÀ ±¸ ±·³³ ¾! PMT ¾! ² ¾! I»Y ¾! · ¾! N ¾! &PT ¾! )V \$ns" RM ¶²³ ±¸²²
• Fall '16
• Wang Ah Yong

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