Tutorial for Chapter 3 1. 2. 3. 4. 5. 6. Name two type of interest calculation.

What are the differences between simple interest and compound interest? List out notations used in simple interest. Calculate future value of a 6 years loan with principal of RM24,000 and 8.5% interest rate. RM20,000 now is economically equivalent to RM X one year from now if the interest rate in 7% per year. Calculate the X. Draw cash flow for the following problem: End of year Cash flow 0 +RM1000 1 -RM680 2 -RM640 Given interest rate is 8% per year compounded quarterly. What is the true annual interest rate? Given interest rate is 18% per year and compounded monthly. What is the true, effective annual interest rate?

7. 8.

Tutorial for Chapter 4 1. If you were to invest RM2000 today in a Fixed Deposit paying 8% per year, how much would the Fixed Deposit be worth at the end of year three? 2. How much would you need to invest today in a Fixed Deposit paying 5% per year if you needed RM7400 five years from today? 3. What is your monthly house loan payment on a RM58K loan if you quoted 5.35% interest for a 30 year loan? 4. If you invest in a college savings plan by making equal and consecutive payments of RM5000 on your childs birthdays, how much will the account be worth when your child turns 18, assuming an interest rate of 5%?