CHAPTER Consumer Mathematics:

3
Savings and Investments,
Credit and Debt

What
What will
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wil you learn?
lear
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?

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3.2 &UHGLWDQG'HEW0DQDJHPHQW

Why
Why do
do you
you learn
learn this
this chapter?
chapter?
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51
51
 3.1 Savings and Investments

What are savings and investments? LEARNING

STANDARD
Savings UHIHU WR H[FHVV PRQH\ GHSRVLWHG LQ WKH VDIH PRQH\ ER[ RU
Recognise various types of
GUDZHU([WUDPRQH\FDQDOVREHGHSRVLWHGDWDEDQNWKDWZLOOSURYLGH savings and investments.
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BULLETIN
Savings Account
‡ 7KH VDYLQJV DFFRXQW KROGHU FDQ VDYH DQ\ Credit counselling
and credit agencies
DPRXQWDFFRUGLQJWRKLVDELOLW\ encourage each
3

‡ 7KHDFFRXQWKROGHUUHFHLYHVWKHLQWHUHVWEDVHG individual to save 10% of

CHAPTER

RQWKHWRWDODPRXQWDQGGXUDWLRQRIVDYLQJV their monthly income.

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WHOOHUPDFKLQH$70

Fixed Deposit Account

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PRQWKVRU\HDUWHQXUH
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52
 Chapter 3 Consumer Mathematics: Savings
and Investments, Credit and Debt

Investment LVDQDOWHUQDWLYHVWHSIRUIXWXUHUHWXUQVLQWKHIRUP BULLETIN

RI FXUUHQW LQFRPH DQG FDSLWDO JDLQV 7\SHV RI LQYHVWPHQWV DUH DV
There are two types
IROORZV of investors, that is,
aggressive and moderate
investors:
Ƈ Aggressive investors
– invest in stock
8QLW7UXVW Investment 6KDUHV market.
Ƈ Moderate investors
– buy unit trusts, bonds
and equity funds.
5HDO(VWDWH
TIPS

3
Shares
Luxury Stocks (Blue

CHAPTER
Chip Stocks) are stocks
 $ FRPSDQ\ ZLOO LVVXH VKDUHV IRU WKH SXUSRVH RI UDLVLQJ FDSLWDO of large companies
$QLQGLYLGXDOZKRSXUFKDVHVVKDUHVIURPDFRPSDQ\LVWKHRZQHURI with track records of
excellent business such
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UHWXUQVLQWKHIRUPRIGLYLGHQGVDQGFDSLWDOJDLQV Petronas.

Unit Trust
BULLETIN

 7UXVWIXQGLVFRQWUROOHGE\DXQLWWUXVWFRPSDQ\WKDWLVPDQDJHG Ƈ ,QYHVWPHQWUHWXUQV
comprise current income
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FROOHFW PRQH\ IURP LQYHVWRUV DQG WKH PRQH\ LV LQYHVWHG LQ YDULRXV dividends, bonus
shares.
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LQYHVWRUV additional or increased
investment value from
its original amount. For
example, stock prices
rose from RM2.00
Real Estate
to RM2.20, thus the
addition of RM0.20
 ,QYHVWPHQWV RQ LPPRYDEOH DVVHWV VXFK DV UHVLGHQWLDO KRXVHV was an increase in
investment value.
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FRQVLGHUYDULRXVDVSHFWVEHIRUHLQYHVWLQJ
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 )DFWRUVWREHFRQVLGHUHGLQUHDOHVWDWHLQYHVWPHQWDUHHFRQRPLF
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insurance and health
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ZLOOUHFHLYHDQLQYHVWPHQWUHWXUQLQWKHIRUPRIUHQWDQGFDSLWDOJDLQV as an investment or
savings?

53
 Brainstorming 1 In groups
Aim: 7RLGHQWLI\W\SHVRIVDYLQJVDQGLQYHVWPHQWV
Steps: 
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Type of Type of Description
savings investment
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3

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54
 Chapter 3 Consumer Mathematics: Savings
and Investments, Credit and Debt

 :KDWGR\RXXQGHUVWDQGDERXWWKHEHQH¿WVRIVDYLQJV" LEARNING
STANDARD
Perform calculations
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involving simple interest
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simple interestDQGcompound interest for savings, and hence
explain the impact of
Simple interest changes in period, rate
of interest or return and
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GHSRVLWDPRXQWSULQFLSDOIRUDFHUWDLQSHULRGRIWLPHLQ\HDUV on the future value of
savings.

3
CHAPTER
Example 1
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PXFKLVWKHLQWHUHVWHDUQHGE\(QFLN=DLQDODIWHU\HDU"
Solution:
7KHSULQFLSDOGHSRVLWHGE\(QFLN=DLQDOLV506RRI50LV
   
50î²± 50 TIPS
 
Rate is given in percentage
$IWHU\HDUWKHLQWHUHVWHDUQHGE\(QFLN=DLQDOLV form. Thus, we must divide
the rate by a hundred. If
,QWHUHVW 50î
the time is given in months,
 50 do not forget to change
to year by dividing by 12
months.
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I LVWKHLQWHUHVW, P LVWKHSULQFLSDOULVWKHUDWHDQGWLVWKHWLPHLQ\HDUV

Example 2

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\HDUV&DOFXODWHWKHWRWDOLQWHUHVWWKDW(QFLN%DGUXOZLOOUHFHLYHIRUWKH\HDUSHULRG

Solution:
   
P U  ²± W 
   
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   50î²±î
   
   50

55
 Example 3 Jenis-jenis Faedah
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Solution:
I 3UW
    
 50î²±î²
  
 50

What is the impact on the simple interest as a result of changing the savings period?
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3
CHAPTER

Example 4
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WRWDOVDYLQJVRI(QFLN1D]ULQDIWHUKHKDVVDYHGIRU
D\HDUVE\HDUV
Solution:
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3ULQFLSDO  50
,QWHUHVWUDWH  

D\HDUV E\HDUV
         
,QWHUHVW  50î²±î 50 ,QWHUHVW  50î²±î 50
       
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5050 5050
50 50

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What is the impact if the given interest rates differ for the same principal?

Dad, what is the

impact on the total The total annual
annual returns if returns received will
interest rates are surely be different.
different for the
same principal?

56
 Chapter 3 Consumer Mathematics: Savings
and Investments, Credit and Debt

Example 5 QU I Z
Why is a fixed deposit
0UV9DQPDWK\GHSRVLWVDVXPRI50LQDEDQN:KDWLVWKHDPRXQW account given a higher
RI0UV9DQPDWK\
VVDYLQJVDIWHU\HDULIWKHLQWHUHVWUDWHJLYHQLV interest rate than a
D SHUDQQXP E SHUDQQXP savings account?

:KDW LV WKH GLIIHUHQFH EHWZHHQ WKH DPRXQWV RI LQWHUHVW HDUQHG E\          
0UV9DQPDWK\LQWKHDERYHVLWXDWLRQV"
Solution:
Total Interest Savings period Total savings
Total interest
savings rate (years) after 1 year
 5050
50î²±î

3
50    50
 50
 

CHAPTER
 5050
50î²±î
50    50
  
50

7KHGLIIHUHQFHEHWZHHQWKHWRWDOLQWHUHVWVUHFHLYHGLV50±50 TIPS
50 The higher The
the interest higher the
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LQFUHDVHWKHWRWDOVDYLQJVDWWKHHQGRIWKH\HDUDOVRLQFUHDVHV The lower The
the interest lower the
rate return
Compound interest
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DFFXPXODWHGLQWHUHVWIURPWKHSUHYLRXVSHULRGRIVDYLQJV
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 ,QWKH¿UVW\HDUWKHDPRXQWRILQWHUHVWUHFHLYHGLV
 
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Scan the QR Code or
 )RU WKH VHFRQG \HDU WKH DPRXQW RI VDYLQJV XVHG IRU LQWHUHVW visit http://bukutekskssm.
FDOFXODWLRQLV50SULQFLSDO¿UVW\HDULQWHUHVW my/Mathematics/F3/
Chapter3Compund.pdf for
7KXVLQWHUHVWDWWKHHQGRIWKHVHFRQG\HDULV more information about
  compound interest.
50î²± 50
 
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VVDYLQJVDWWKHHQGRIWKHVHFRQG
\HDULV
  5050 50

57
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50
  50

Example 6
$WWKHEHJLQQLQJRID\HDU0UV/LHZ)RRQJVDYHV50LQKHUVDYLQJVDFFRXQWZLWKDUDWHRI
SHUDQQXPDQGFRPSRXQGHGHYHU\PRQWKV:KDWLV0UV/LHZ)RRQJ¶VWRWDOVDYLQJVDWWKHHQG
RIWKHWKLUG\HDU"
Solution: QU I Z
P U ²±  Q W  What is the impact on
 the total cumulative
returns, if the
   

MV P —
    
U QW
Q
compounding rate
increases in a year?
   

   ²²
 
 

  
  50

Example 7
$EDQNRIIHUVDLQWHUHVWUDWHSHUDQQXPIRUVDYLQJVLQD¿[HGGHSRVLW BULLETIN
DFFRXQW ,I 3XDQ :DKLGDK VDYHV 50  DW WKH EHJLQQLQJ RI WKH
,QÀDWLRQDOVRDIIHFWV
\HDUKRZPXFKPRQH\LVLQKHU¿[HGGHSRVLWDFFRXQWDWWKHHQGRIWKH the value of the
\HDULIWKHLQWHUHVWLVFRPSRXQGHG FXUUHQF\,IWKHLQÀDWLRQ
DRQFHHYHU\PRQWKV"ERQFHDPRQWK" rate increases, the
purchasing power of
Solution: RM1 will reduce.
 W 
P U ²±

   
MV
  P  U
 —
Q QW

58
 Chapter 3 Consumer Mathematics: Savings
and Investments, Credit and Debt

(a) n  (b) n 

Thus, Thus,
0.05  0.05 
(
MV  ²²
4 ) MV   ²²
 (  )
   50     50
From Example 7, it was found that when the compounding frequency increases, the future value of
savings also increases.

Example 8
0U&KDUOHVGHSRVLWHG50LQD¿[HGGHSRVLWDFFRXQW DW%DQN %HUMD\DIRU  \HDUV ZLWK DQ
interest rate of 6% per annum. What is the difference between the amount of interest Mr Charles

3
earned if he was given compound interest (compounded once every 4 months) compared to simple

CHAPTER
interest?
Solution:
Simple interest Compound interest
Interest, I Prt r nt


6
50î²±î
MV P —
n ( )
0.06 
 50
   (
 ²²
 )
  50
Total accumulated interest
50±50 50

Thus, the difference in the amount between simple interest and compound interest (compounded
once every 4 months) is
50±50 50
%DVHGRQ([DPSOHLWLVFOHDUWKDWVDYLQJVZLWKFRPSRXQGLQWHUHVWJLYHKLJKHUUHWXUQVWKDQVDYLQJV
with simple interest.

Islamic Banking
 0DOD\VLDSUDFWLVHVDGXDOEDQNLQJV\VWHP7KH\DUHFRQYHQWLRQDOEDQNLQJV\VWHPDQG,VODPLF
EDQNLQJV\VWHP

Islamic Banking System

5LVNLV %DVHGRQWKH
Does not specify rate of return
%DVHGRQ managed SULQFLSOHRIMXVWLFH
on early stage of savings.
Islamic law according KDODODQGSUR¿W
(syarak). to the sharing and without 7KHUHDOUDWHRIUHWXUQLVNQRZQ
agreement. usury. upon maturity.

59
 Example 9 BULLETIN
The principle of wadiah
(QFLN2VPDQVDYHG50LQDVDYLQJVDFFRXQWLQDQ,VODPLFEDQN Property or cash received
DFFRUGLQJWRWKHSULQFLSOHRIZDGLDKIRU\HDU%\WKHHQGRIWKH\HDU with the agreement of the
KH UHFHLYHG D VXP RI 50  DV D UHWXUQ IURP WKH VDYLQJV $Q customer to be deposited
in the bank. The bank
DGGLWLRQDO 50 LV D KLEDK JLIW IURP WKH EDQN &DOFXODWH WKH is responsible for the
SHUFHQWDJHRIKLEDKREWDLQHGE\(QFLN2VPDQ security of the property or
the money.
Solution:
 50 LVRQO\DUHIHUHQFHIRU
3HUFHQWDJHRIKLEDK ²²²²±î  VDYLQJVDQGLVQRW¿[HG
 50
3

MIND TEST 3.1b

CHAPTER

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SHUDQQXPDQGFRPSRXQGHGTXDUWHUO\+RZPXFKLV3XDQ1DWKDQLD
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SHUDQQXPDQGFRPSRXQGHGPRQWKO\+RZPXFKLV3XDQ$PLQDK
VVDYLQJVDWWKHHQGRIWKH
VHFRQG\HDU"

What do you understand by return on investment (ROI)? LEARNING

STANDARD
5HWXUQRQLQYHVWPHQWUHIHUVWRWKHUHWXUQYDOXHRIHDFKULQJJLWLQYHVWHG Perform calculations
involving the value of
E\ WKHLQYHVWRU,QRWKHUZRUGVUHWXUQRQLQYHVWPHQWLVDOVRDUDWLRRI return on investments, and
SUR¿WRUORVVGHULYHGIURPDQLQYHVWPHQW hence explain the factors
that affect the return
 ,Q JHQHUDO LQYHVWRUV SUHIHU WR DVVHVV WKH UHWXUQ RQ LQYHVWPHQW LQ on investments and its
SHUFHQWDJH5HWXUQRQLQYHVWPHQWZLOOUHÀHFWWKHSUR¿WRUORVVDFKLHYHG impacts.
E\ LQGLYLGXDOLQYHVWRUVLQLQYHVWPHQW
 $QLQYHVWPHQWLVFRQVLGHUHGSUR¿WDEOHZLVHLQYHVWPHQWZKHQWKH BULLETIN
SUHVHQW YDOXH RI WKH LQYHVWPHQW DQG WKH DPRXQW RI UHWXUQ UHFHLYHG LV School cooperatives
PRUHWKDQWKHYDOXHRIWKHRULJLQDOLQYHVWPHQW declare dividends at the
HQGRIHDFK¿QDQFLDO
 6LPLODUO\ ZKHQ WKH DPRXQW RI UHWXUQ DQG WKH SUHVHQW YDOXH RI year. The declared
WKH UHWXUQ LV OHVV WKDQ WKH YDOXH RI WKH RULJLQDO LQYHVWPHQW WKHQ WKH dividend determines
LQYHVWPHQWLVXQSUR¿WDEOH the return value of the
shares purchased by
 7KHIRUPXODIRUFDOFXODWLQJUHWXUQRQLQYHVWPHQWLV each member of the
cooperative.
  7RWDOUHWXUQ
5HWXUQRQLQYHVWPHQW ²²²²²²²±²²²±î
  9DOXHRILQLWLDOLQYHVWPHQW

60
 Chapter 3 Consumer Mathematics: Savings
and Investments, Credit and Debt

 ,QDGGLWLRQLQYHVWRUVDOVRKDYHDQH[SHFWHGUDWHRIUHWXUQIURPDQLQYHVWPHQW)RUH[DPSOHDQ
LQYHVWRUH[SHFWVDUDWHRIUHWXUQRIRQWKHLULQYHVWPHQW+RZHYHUWKHUHDOUDWHRIUHWXUQWREH
UHFHLYHGPD\QRWEHDVH[SHFWHG
 ,QYHVWPHQWLQVWUXPHQWVFRQVLVWRIWKHXQLWWUXVWVKDUHVUHDOHVWDWHDQGVRRQ(DFKRIWKHVH
LQYHVWPHQWLQVWUXPHQWVZLOOEULQJUHWXUQV

Unit Trust
 8QLWWUXVWLVDJRRGLQYHVWPHQWDOWHUQDWLYHIRUPHGLXPWHUPLQYHVWPHQWWR\HDUVDQGORQJ
WHUPRYHU\HDUV
 ,QYHVWPHQWV LQ XQLW WUXVWV DUH ORZ ULVN DV WKH\ DUH PDQDJHG E\ SURIHVVLRQDO IXQG PDQDJHUV
UHJXODWHGE\WKHVHFXULWLHVFRPPLVVLRQDQGDOVRPRQLWRUHGE\%DQN1HJDUD0DOD\VLD

3
 ,QYHVWPHQWVLQXQLWWUXVWVDOORZLQYHVWRUVWRGLYHUVLI\WKHLULQYHVWPHQWVZLWKDVPDOOFDSLWDO

CHAPTER
 %HORZLVWKHUHWXUQIRUXQLWWUXVWV
Return for Unit Trusts

Dividends8VXDOO\UHFHLYHG Bonus sharesDUHDGGLWLRQDO Capital gain

DWWKHHQGRIWKH¿QDQFLDO\HDU VKDUHVWKDWDUHJLYHQIUHHWR LQFUHDVHLQVKDUHSULFH
DQGFDOFXODWHGEDVHGRQWKH H[LVWLQJVKDUHKROGHUV ZKHQVKDUHVDUHVROG
PRQH\LQYHVWHG

Example 10
2Q-DQXDU\3XDQ6LWLLQYHVWHGXQLWVYDOXHGDW50SHUXQLWLQ$PDQDK6DKDP
%XPLSXWHUD$6%)RUWKH¿QDQFLDO\HDUHQGLQJ'HFHPEHU$PDQDK6DKDP%XPLSXWHUD
SDLGDGLYLGHQGRI2Q-DQXDU\3XDQ6LWLVROGDOOWKHVKDUHVVKHRZQHGDW50SHU
XQLW:KDWLVWKHUHWXUQRQLQYHVWPHQWIRU3XDQ6LWL"
Solution:
Steps for calculating dividend
,QLWLDOFDSLWDO î50
  50
   
'LYLGHQG ²±îXQLWVî50
 
  50
,QFUHDVHLQVKDUHSULFH 50±50 50
&DSLWDOJDLQ 50îXQLWV
 50
7RWDOUHWXUQ 5050 50

50
5HWXUQRQLQYHVWPHQW ²²²²î 
 50
7KHUHWXUQRQLQYHVWPHQWEHQH¿WV3XDQ6LWLDVVKHUHFHLYHVWZRW\SHVRIUHWXUQVQDPHO\GLYLGHQG
DQGFDSLWDOJDLQIURPDQLQFUHDVHLQVKDUHYDOXHIURP50WR50

61
 What do you understand about return on investment for real estate?

,QYHVWPHQWLQUHDOHVWDWHLVRQHRIWKHLQYHVWPHQWVWKDWEULQJUHWXUQVLQWKHIRUPRIUHQWDQGFDSLWDO
JDLQV :KHQ D SURSHUW\ LV UHQWHG WKH RZQHU LQYHVWRU RI WKH SURSHUW\ ZLOO UHFHLYH UHWXUQ LQ
WKHIRUPRIUHQW,IWKHSURSHUW\LVVROGWKHRZQHULQYHVWRUZLOOUHFHLYHFDSLWDOJDLQRUFDSLWDO
ORVV

Real Estate
3
CHAPTER

Land House Commercial Lot

Returns
Returns

Returns

Rental and Rental and Rental and

capital gain capital gain capital gain

Example 11
BULLETIN
(QFLN<XVXIERXJKWDVKRSORWDWDSULFHRI50RQ-DQXDU\ Stamp duty
 LQ %DQJL +H SDLG  RI WKH VKRSORW
V SXUFKDVH SULFH RI Tax imposed on
documents or letters
50 7KH VKRSORW ZDV UHQWHG IURP  -DQXDU\  2Q with legal, commercial
 'HFHPEHU  KH VROG WKH VKRSORW IRU 50 7KH ORDQ RU¿QDQFLDOLPSOLFDWLRQV
DPRXQWVWLOORZHGWRWKHEDQNZDV500HDQZKLOHWKHDPRXQW under the First Schedule,
of Stamp Act 1949.
WKDW KDV EHHQ DPRUWLVHG WR WKH EDQN ZDV 50 2WKHU FKDUJHV
LQYROYHGLQWKHVDOHDQGSXUFKDVHWUDQVDFWLRQVDUHDVIROORZV Legal cost
Payment to lawyer to
perform the transfer of
Legal cost 50 property for the buyer.
Commission
Stamp duty (during sale and purchase) 50 Fee paid by the property
seller to the agent for the
Agent’s commission 50 sale of real estate.

62
 Chapter 3 Consumer Mathematics: Savings
and Investments, Credit and Debt

7KHWRWDOUHQWFROOHFWHGWKURXJKRXWWKHSRVVHVVLRQRIWKHVKRSORWLV50&DOFXODWHWKHUHWXUQ
RQLQYHVWPHQWREWDLQHGE\(QFLN<XVXI

Solution:
7RWDOUHQW  50
&DSLWDOJDLQ  50±50±50±50±50
    ±50±50
    50
7RWDOUHWXUQ  5050
    50
      50
5HWXUQRQLQYHVWPHQW ²²²²²î
      50

3
     

CHAPTER
Example 12

(QFLN +XVVHLQ ERXJKW D KRXVH RQ  -DQXDU\  LQ          

&KHUDV DW 50  DQG FOHDUHG  GRZQ SD\PHQW RI
50+HH[SHFWVDUHWXUQRIRYHU\HDUV

(QFLN+XVVHLQVROGWKHKRXVHDWDSULFHRI50DIWHUKDYLQJRZQHGWKHKRXVHIRU\HDUV
7KHORDQDPRXQWDPRUWLVHGWRWKHEDQNZDV50'XULQJWKDWSHULRGKHPDQDJHGWRHDUQD
UHQWRI502WKHUH[SHQVHVLQFXUUHGDUHDVIROORZV

Stamp duty (during sale and purchase) 50

Agent's commission 50
Legal cost during sale and purchase 50

:KDWLVWKHUHWXUQRQLQYHVWPHQWIRU(QFLN+XVVHLQIRU\HDUV"'LGKHDFKLHYHKLVH[SHFWDWLRQWR
JHWDUHWXUQRI"

Solution:
5HWXUQRQLQYHVWPHQW
 5HQW&DSLWDOJDLQ
 5050±50±50±50±50±50
 5050
 50
   50
5HWXUQRQLQYHVWPHQW ±±±±±±±±±±=
   50
(QFLN+XVVHLQPDQDJHGWRREWDLQDUDWHRIUHWXUQ
   RI7KLVUDWHH[FHHGVWKHH[SHFWHGUDWHRI
UHWXUQRI

63
 ,QUHDOHVWDWHLQYHVWPHQWWKHUHDUHIDFWRUVWKDWDIIHFWWKHUHWXUQRQLQYHVWPHQW7KHIDFWRUVWKDWDIIHFW
UHWXUQRQLQYHVWPHQWDUHDVIROORZV
3
CHAPTER

Location
‡ 7KHSURSHUWLHVWKDWDUH
VWUDWHJLFDOO\ORFDWHGQHDUD
The economic situation YDVWO\GHYHORSHGFLW\FHQWUH
‡ 7KHFRXQWU\
VJRRGHFRQRPLF KDYHKLJKHUSULFHVFRPSDUHG
VLWXDWLRQZLOOLQFUHDVHUHDO WRSURSHUWLHVLQUXUDODUHDV
HVWDWHSULFHVEHFDXVHWKH
GHPDQGIRUUHDOHVWDWHZLOO
LQFUHDVH

Factors that
affect the return
on investment on
real estate

Political situation
‡ $VWDEOHSROLWLFDOVLWXDWLRQZLOOLQFUHDVHGHPDQGIRUUHDOHVWDWH
‡ 7KLVZLOOLQGLUHFWO\LQFUHDVHUHDOHVWDWHSULFHV
‡ 3ROLWLFDOLQVWDELOLW\ZLOOUHGXFHGHPDQGIRUUHDOHVWDWHDQG
LQGLUHFWO\FDXVHWKHIDOORIUHDOHVWDWHSULFHV

64
 Chapter 3 Consumer Mathematics: Savings
and Investments, Credit and Debt

MIND TEST 3.1c

1. :KDWLVWKHPHDQLQJRIUHWXUQRQLQYHVWPHQWRU52,"

2.

3
CHAPTER
 + 2Q-DQXDU\0U0RVHVERXJKWDKRPHVWD\DWDSULFHRI50
 + 7KHGDLO\UHQWDOUDWHLV50
 + 2QDYHUDJHWKHKRPHVWD\ZLOOEHRFFXSLHGIRUGD\VLQDPRQWK
  D &DOFXODWHWKHPRQWKO\UHQWDOV
  E &DOFXODWHWKHUHWXUQLIWKHKRPHVWD\LVVROGIRU50DWWKHHQGRIWKH\HDU

3. 2Q-DQXDU\5DKLPLQYHVWHGLQXQLWVRI$PDQDK6DKDP%XPLSXWHUD$6%

VKDUHVYDOXHGDW50SHUXQLW)RUWKH¿QDQFLDO\HDUHQGLQJ'HFHPEHU$6%
SDLGDGLYLGHQGRI
 +RZPXFKLVWKHGLYLGHQGUHFHLYHGE\5DKLPIRUWKDW\HDU"

What factors should be considered before making LEARNING

an investment? STANDARD
Compare and contrast
potential risks, return
and liquidity of various
7KUHHIDFWRUVWKDWVKRXOGEHWDNHQLQWRDFFRXQWE\DQLQYHVWRU
types of savings and
SULRUWRPDNLQJDQLQYHVWPHQWDUHDVIROORZV investments.

7KH XQFHUWDLQW\ WKDW ORVVHV PD\ EH LQFXUUHG IURP WKH

Potential investment risk
LQYHVWPHQWVPDGH

The level of return 3UR¿WHQMR\HGE\LQYHVWRUVIURPLQYHVWPHQWV

5HODWLQJ WR KRZ VRRQ WKH LQYHVWPHQW RU VDYLQJV FRXOG EH
Liquidity aspect
FDVKHGRXW

65
 7KHWDEOHEHORZVKRZVWKHFRPSDULVRQRIYDULRXVW\SHVRIVDYLQJVDQG TIPS
LQYHVWPHQWV E\ LQGLYLGXDOV LQ WHUPV RI ULVN OHYHOV UHWXUQ OHYHOV DQG
OLTXLGLW\OHYHOV One way to reduce
investment risk is
Type of Risk Return Liquidity to diversify one's
investment level level level investment portfolio.
This helps to offset risks
6DYLQJ 5LVNIUHH /RZ +LJK from each investment
and thus further
reduce the risk in the
)L[HGGHSRVLWV 5LVNIUHH /RZ +LJK
investment portfolio.

&RPSDQ\VKDUHV +LJK +LJK 0RGHUDWH

BULLETIN
5HDOHVWDWH 0RGHUDWH +LJK /RZ
3

Portfolio
Various levels of
CHAPTER

8QLWWUXVW /RZ 0RGHUDWH +LJK investment type.

MIND TEST 3.1d

1. ([SODLQWKHUHODWLRQVKLSEHWZHHQULVNDQGUHWXUQRQLQYHVWPHQW
2. 7KHSRWHQWLDOULVNRIVDYLQJLQDEDQNLV]HURDVFRPSDUHGWRLQYHVWPHQW([SODLQWKLV
VWDWHPHQW
3. :K\GRXQLWWUXVWVKDYHDKLJKOLTXLGLW\OHYHO"
4. 5HDOHVWDWHKDVDPRGHUDWHSRWHQWLDOULVN([SODLQ
5.

‡50SHUGD\

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RIVHWWLQJXSWKLVKRPHVWD\LV50
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 E 6WDWHWKHSRWHQWLDOULVNVUHWXUQDQGOLTXLGLW\RIWKHLQYHVWPHQWPDGHE\(QFLN2VPDQ
 F ,Q\RXURSLQLRQZDVWKHLQYHVWPHQWPDGHE\(QFLN2VPDQDZLVHPRYH"-XVWLI\


66
 Chapter 3 Consumer Mathematics: Savings
and Investments, Credit and Debt

What do you understand about cost averaging strategy? LEARNING

STANDARD
&RVW DYHUDJLQJ VWUDWHJ\ LV D WHFKQLTXH FRPPRQO\ SUDFWLVHG E\
Calculate the average
LQYHVWRUVZKRLQYHVWLQVKDUHVZLWKD¿[HGDPRXQWIRUDFHUWDLQSHULRG cost per share for the
VXFK DV PRQWKO\ TXDUWHUO\ RU \HDUO\ UHJDUGOHVV RI WKH VWRFN PDUNHW investment of shares using
FRQGLWLRQV the ringgit cost averaging
strategy and explain the
 &RVWDYHUDJLQJVWUDWHJLHVFDQKHOSLQYHVWRUVWREX\VKDUHVZLWKD EHQH¿WVRIWKHVWUDWHJ\
ORZHUDYHUDJHFRVWDQGWKHWRWDOQXPEHURIVKDUHVRZQHGZLOOEHKLJKHU
ZLWKLQ WKH VDPH LQYHVWPHQW SHULRG DV RSSRVHG WR EX\LQJ WKHP LQ D
OXPSVXPRUZLWKDVLQJOHSXUFKDVH
 )RUH[DPSOH3XDQ+DVQL]DKDV50DQGEX\VVKDUHVLQDOXPSVXPIURP6HPSXUQD
&RPSDQ\ DW 50 SHU VKDUH XQLW +HQFH 3XDQ +DVQL]D ZLOO RQO\ KDYH   XQLWV RI VKDUHV
XQLWVRIVKDUHVî50 50+RZHYHUWKHVLWXDWLRQZLOOEHGLIIHUHQWLI3XDQ

3
+DVQL]DGHFLGHVWREX\VKDUHVEDVHGRQFRVWDYHUDJLQJVWUDWHJ\

CHAPTER
7KHWDEOHEHORZVKRZV3XDQ+DVQL]D
VLQYHVWPHQWFKDUWLQD\HDUEDVHGRQFRVWDYHUDJLQJVWUDWHJ\
IRUEX\LQJVKDUHVRQDPRQWKO\EDVLV

Investment Number Investment amount

0RQWK 8QLWSULFH50 = ————–————
DPRXQW50 of unit Unit price
-DQXDU\   
)HEUXDU\   
0DUFK   
$SULO   
0D\   
-XQH   
-XO\   
$XJXVW   
6HSWHPEHU   
2FWREHU   
1RYHPEHU   
'HFHPEHU   
 

DYHUDJHFRVWSHUVKDUHXQLW QXPEHURIXQLWVRZQHG

:LWK WKH FRVW DYHUDJLQJ VWUDWHJ\ JLYHQ DERYH 3XDQ +DVQL]D HDUQHG  XQLWV E\ LQYHVWLQJ
50
Cost averaging strategy TIPS
Investment amount When you use cost
Average Cost = averaging strategy to
Number of share
units owned invest in shares, the
cost of the shares you
Average cost = RM12 000
————– = RM1.78 have bought will not
per share unit 6 741 be the highest price
nor will it be the lowest
price.

67
 Example 13
Below are two investors who plan to invest in shares using different strategies.

I would like to invest

RM20 000 to buy shares
and would accumulate the
shares in the designated
months by spending the
same amount
of money.
I want to invest a lump
sum of RM20 000 to buy
Pelita Company shares
at RM2.00 a unit.

Mrs Esther Wong Puan Linda

3

Shares acquired by Mrs Esther Wong in the designated months:

CHAPTER

Month January March May August December

Shares price per
2.00 1.80 1.60 2.10 2.00
unit (RM)

(a) Calculate the average cost per unit and the number of shares owned by Puan Linda and Mrs
Esther Wong.
(b) Who is a wise investor? Justify your answer.
Solution:
(a) Puan Linda
RM20 000
Total shares = ————— = 10 000 share units
RM2.00
RM20 000
Average cost per share = —————–––––
10 000 share units
= RM2.00
Mrs Esther Wong
Month Total investment Price per unit ( RM) Number of share unit
January 4 000 2.00 2 000 units
March 4 000 1.80 2 222 units
May 4 000 1.60 2 500 units
August 4 000 2.10 1 904 units
December 4 000 2.00 2 000 units
20 000 10 626 share units
Total shares = 10 626 share units
RM20 000
Average cost per share = —————
10 626 units
= RM1.88
(b) Mrs Esther Wong is a wise investor for practising the cost averaging strategy that helped her to
accumulate more shares with the same amount of money.

68
 Chapter 3 Consumer Mathematics: Savings
and Investments, Credit and Debt

Able to take advantage of the unit price changes

‡ :KHQWKHVWRFNSULFHLVORZPRUHXQLWVRIVKDUHVFDQEHSXUFKDVHG
‡ ,QGLUHFWO\KHOSVLQYHVWRUVWRKDYHPRUHVKDUHVLQWKHORQJWHUP
The average cost of a share unit bought by an investor can be reduced in
the long term.
Advantage
of the cost
averaging 1RWLQÀXHQFHGE\HPRWLRQV
strategy for ‡ ,QYHVW FRQVLVWHQWO\ RQ D SHULRGLF EDVLV WKH VDPH DPRXQW RI PRQH\
investors ZLWKRXWEHLQJLQÀXHQFHGE\HPRWLRQVFDXVHGE\VKDUHSULFHÀXFWXDWLRQ

3
Lower the risk of loss

CHAPTER
‡ 7RWDO LQYHVWPHQW LV FDUULHG RXW RQ D UHJXODU DQG FRQVLVWHQW PDQQHU
which helps investors to purchase based on current situation and avoid
losses associated with lump sum investment.

MIND TEST 3.1e

1. What do you understand about the cost averaging strategy in purchasing shares?
2. Below are two investors who invested using different strategies.

Mr Derick invested a lump sum of RM24 000 to purchase

Investor
In
nve
vest
stor
st orr 1 Wawasan shares at RM2.00 per share unit.

Encik Sulaiman has RM24 000 and invested consistently on a

Investor
In
nve
vest
stor
st orr 2
periodic basis RM2 000 each month to purchase Wawasan shares.

Month Jan Feb March April May June July Aug Sept Oct Nov Dec
Share price
per unit 2.00 1.80 1.70 1.60 2.10 1.50 2.20 2.00 2.00 1.60 1.70 1.80
(RM)

The table above shows the share price bought by Encik Sulaiman on a monthly basis.
(a) Who is a wise investor? Justify your answer.
(b) Calculate the average cost per share unit and the number of shares owned by Encik
Sulaiman.
(c) State the advantages of using cost averaging strategy in purchasing shares.

69
 How do you solve problems involving savings and LEARNING
investments? STANDARD
Solve problems involving
savings and investments.
Example 14
(QFLN=DLGL0U/HRQJDQG0U1DYLQKDGUHWLUHGIURPWKHLUMREVDQGHDFKUHFHLYHG50DV
gratuity from their company. They use different investment methods to invest.

Who is a wise investor?

3
CHAPTER

(QFLN=DLGLERXJKWDPHGLXPFRVWDSDUWPHQWLQ.DMDQJ
Apartment
worth RM150 000 and receives a rental of RM800 per
PRQWK 7KH EDODQFH LV NHSW LQ D ¿[HG GHSRVLW DFFRXQW
with an interest rate of 4% per annum.

Encik Zaidi

Mr Leong invested RM400 000 in Manis Company shares

at RM2.00 per unit. The company declared a dividend of
8% for that year.

Mr Leong

0U1DYLQGHSRVLWHG50LQWRDVDYLQJVDFFRXQW
with an interest rate of 1% per annum. The balance
50 LV NHSW LQ D ¿[HG GHSRVLW DFFRXQW DW 
interest rate per annum.

Mr Navin

70
 Chapter 3 Consumer Mathematics: Savings
and Investments, Credit and Debt

Solution:
Encik Zaidi

Level of risk 7KHOHYHORIULVNIRUSURSHUW\DSDUWPHQWVDQG¿[HGGHSRVLWVLVORZ

Return on Receives a return on investment in the form of rent and interest.
investment
Rental Savings interest Return on investment (ROI)
RM800 × 12 = RM9 600 4 RM19 600
—— × RM250 000 ROI = ——–––––– × 100%
100 RM400 000
= RM10 000 = 4.9%
Liquidity Savings are easily converted to cash while property takes time to sell.

3
CHAPTER
Mr Leong
Level of risk The level of risk in buying shares is high.
Return on Receives dividends and bonuses depending on the performance of the company
investment LQYHVWHGLQ,IKHVHOOVKLVVKDUHVLWLVXQFHUWDLQWKDWKHZLOOEHDEOHWRVHOOWKH
shares at a higher price compared to the purchase price. This depends on the
economic situation and performance of the company stock at that period.
Dividend = 400 000 × —– 8 RM32 000
ROI = ——–––––– × 100%
100 RM400 000
= RM32 000 = 8%

Liquidity Moderate.

Mr Navin
Level of risk 7KHOHYHORIULVNIRUERWKVDYLQJVDQG¿[HGDFFRXQWDUHORZ
Return on Receives a return on investment in the form of interest only.
investment
Savings interest Fixed deposit interest Return on investment (ROI)
1 4 RM10 000
RM200 000 × —– —– × RM200 000 ROI = ——–––––– × 100%
100 100 RM400 000
= RM2 000 = RM8 000 = 2.5%
Liquidity Savings are easily turned into cash.

‡ 0
 U/HRQJLVDZLVHLQYHVWRUEHFDXVHKLVUHWXUQRQLQYHVWPHQWYDOXHLVKLJKHUWKDQ(QFLN=DLGL
DQG0U1DYLQ
‡ ,QWKLVH[DPSOH(QFLN=DLGL0U/HRQJDQG0U1DYLQHDFKXVHVWKHVDPHDPRXQWRIFDSLWDO
which is RM400 000. The effectiveness of their investments can be compared based on their
returns for the year respectively.

71
 MIND TEST 3.1f
1. The following are two investors who invested their gratuity.

0U 5DVDPDQLH UHFHLYHG 50 DV JUDWXLW\ IURP KLV FRPSDQ\ +H ERXJKW D GRXEOH
VWRUH\VKRSLQ%DQJL6HODQJRUDQGUHFHLYHVDPRQWKO\UHQWDORI50
3
CHAPTER

Monthly rental
RM3 500

(QFLN1LN,]ZDQUHFHLYHG50DVJUDWXLW\IURPKLVFRPSDQ\+HVDYHV50
LQD¿[HGGHSRVLWDFFRXQWDWDFRPPHUFLDOEDQNZLWKDQLQWHUHVWUDWHRISHUDQQXP+HDOVR
bought share units worth RM150 000.
$WWKHVDPHWLPH(QFLN1LN,]ZDQERXJKWVKDUHVLQ&HSDW0DMX&RPSDQ\ZRUWK50
The balance of the gratuity is used to buy a medium-cost apartment in Ampang and he
receives a monthly rental of RM1 200.

Monthly rental
RM1 200

D ([SODLQWKHLQYHVWPHQWULVNOHYHORIERWKLQGLYLGXDOV
(b) Who is a wise investor? Justify your answer.
(c) What factors need to be considered before investing in real estate?

2. ,Q0U:RQJERXJKWDKRXVHDW50+HSDLGGRZQSD\PHQWDQGWKHEDODQFH
ZDVSDLGWKURXJKDORDQ$IWHU\HDUV0U:RQJGHFLGHGWRVHOOWKHKRXVHDW507KH
IROORZLQJDUHWKHH[SHQVHVLQYROYHG
Monthly instalment amount paid RM666 000
Stamp duty RM15 000
Agent’s commission RM8 000
Other expenses RM18 000

Calculate the return on investment for Mr Wong.

72
 Chapter 3 Consumer Mathematics: Savings
and Investments, Credit and Debt

3.2 Credit and Debt Management

What do you understand about credit and debt? LEARNING

STANDARD
Explain the meaning
7KHZRUGFUHGLWKDVVHYHUDOPHDQLQJV,QWKH¿QDQFLDOZRUOGcredit of credit and debt, and
means a contractual agreement between the supplier (for instance a hence describe the wise
EDQN RU ¿QDQFLDO LQVWLWXWLRQ DQG WKH FRQVXPHU 7KH FRQVXPHU FDQ management of credit
and debt.
borrow money from the supplier for any use or purchase and agree
WRUHSD\ZLWKLQDFHUWDLQSHULRG,QVKRUWFUHGLWLVDSRVWSRQHPHQWRI
payment facility provided by the supplier to the consumer.

3
CHAPTER
 )RU H[DPSOH EDQNV RIIHU FUHGLW IDFLOLWLHV WR         
FXVWRPHUVLQWKHIRUPRIFUHGLWFDUGV,IWKHFXVWRPHURU
FUHGLWFDUGRZQHUXVHVWKHFUHGLWFDUGLQDWUDQVDFWLRQWKH
EDQN ZLOO SD\ WKH VHOOHU ¿UVW DQG WKH FXVWRPHU ZLOO SD\
back the bank within a certain period of time.

E G ) O I GLW G
 &UHGLWFDQDOVRPHDQWKHDPRXQWRIPRQH\WKDWFDQEHERUURZHG)RUH[DPSOHIRUFUHGLWFDUG
LIWKHFUHGLWFDUGOLPLWLV50WKHQWKHFDUGRZQHU KDV WKHDELOLW\WREX\ JRRGV RU PDNH
transactions up to RM10 000 with the card.

DebtXVXDOO\PHDQVDQDPRXQWWKDWKDVEHHQERUURZHGEXWKDVQRWEHHQVHWWOHG,IDWUDQVDFWLRQ
LVPDGHXVLQJDFUHGLWFDUGWKHFUHGLWZLOOEHFRQYHUWHGLQWRGHEW

Personal budget is the estimated income and

H[SHQGLWXUHRIDQLQGLYLGXDOIRUDJLYHQSHULRG7KHSUDFWLFH
of making personal budget is strongly encouraged so that
an individual can
(a) plan spending prudently
(b) avoid overspending
(c) save

How do you manage credit and debt wisely?

‡ &UHGLWFDUGXVHUVQHHGWRVHWWOHWKHGHEWSD\PHQWZLWKLQWKHSHULRGVWLSXODWHGE\WKHEDQNWR
HQMR\LQWHUHVWIUHHSHULRG
‡ 3D\WKHRXWVWDQGLQJEDODQFHOLVWHGRQWKHFUHGLWFDUGVWDWHPHQW
‡ 7KHPLQLPXPDPRXQWSDLGE\WKHFUHGLWFDUGKROGHUSURYLGHVRSSRUWXQLW\IRUWKHEDQNWR
charge interest on the balance and may also incur late payment charges.
‡ 3D\ZLWKLQWKHFDVKGLVFRXQWSHULRGIRUSD\PHQWRIGHEWV

73
 Example 15
(QFLN6\HGERXJKWDQDLUFRQGLWLRQHUDW50RQ-XO\+HODFNHG50LQFDVKEXW
KDVD%DQN&HPHUODQJFUHGLWFDUG+HZDVDZDUHWKDWWKHVKRUWDJHRIFDVKFRXOGEHSDLGDWWKHHQG
of the month when he received his salary.
(a) Which credit facility can be used by Encik Syed to overcome the shortage of money?
E 6WDWHWKHDGYDQWDJHVDQGGLVDGYDQWDJHVRIWKHSD\PHQWPHWKRG\RXVSHFL¿HGLQDQVZHUD

Solution:
(a) Encik Syed can use the credit card facility.
(b) The use of credit cards is more convenient if Encik Syed repays his credit within the interest-
IUHHSHULRGWRDYRLGDQ\H[WUDFKDUJHV
3
CHAPTER

Brainstorming 2 In groups

Aim: The impact of using credit card in buying goods online.

Steps:
1. *HWLQWRJURXSVRIIRXURU¿YH
2. Surf any website related to the topics of discussion for more information.
3. The information collected should be presented using an appropriate thinking map to the
class.
4. The best thinking map will be displayed in the mathematics corner.

Discussion:
What is the impact of purchasing goods online?

)URP %UDLQVWRUPLQJ  LW LV IRXQG WKDW SXUFKDVLQJ JRRGV RQOLQH FDQ FDXVH FRQVXPHUV WR VSHQG
H[WUDYDJDQWO\DQGJHWLQWRGHEW7KXVEHSUXGHQWZKHQEX\LQJJRRGVRQOLQH

74
 Chapter 3 Consumer Mathematics: Savings
and Investments, Credit and Debt

MIND TEST 3.2a

NICOL REFRIGERATOR
1. What does a personal loan mean?
RM3 200
HEBAT ELECTRICAL SHOP
2. Many people are bankrupt due to credit cards
What are the ways to overcome the situation above?
3. 3XDQ=XUDLGDKZDQWVWREX\DUHIULJHUDWRUDW+HEDW(OHFWULFDO6KRSEXWVKH
ODFNV 50  LQ FDVK +HEDW (OHFWULFDO 6KRS SURYLGHV LQVWDQW ORDQV IRU
purchases with an interest rate of 4% per annum. Puan Zuraidah also has a
credit card. Which credit facility should be used by Puan Zuraidah and state
its advantages?

3
CHAPTER
What do you understand about the advantages and LEARNING
disadvantages of credit cards? STANDARD
Investigate and describe
The use of credit cards is increasingly common today. As a consumer the advantages and
disadvantages of credit card
it is important for us to realise and understand the advantages and and ways to use it wisely.
disadvantages of using credit cards.

Advantages of credit card Disadvantages of credit card

‡ &UHGLWFDUGKROGHUVFDQHQMR\DUHZDUG ‡ ,QFXUFKDUJHVVXFKDVDQQXDOIHHV¿QDQFH
system in the form of cash rebate or point
redemption.
‡ 'RHVQRWUHTXLUHXVWRFDUU\DORWRIFDVK
‡ (DV\DQGHI¿FLHQWSD\PHQWPHWKRG
‡ &RQYHQLHQFHRIEX\LQJJRRGVDQGVHUYLFHV
online.
FKDUJHVLQWHUHVWFDVKDGYDQFHLQWHUHVW
charges and late payment charges.
‡ 2YHUVSHQGLQJ
‡ 6RPHVWRUHVGRQRWDFFHSWFUHGLWSD\PHQW

+RZHYHU QRWDOOLQGLYLGXDOV DUHHOLJLEOHIRU D FUHGLW FDUG7KHUH DUH VHYHUDO FRQGLWLRQV WKDW DQ
applicant must adhere to.

‡ \HDUVROGDQGDERYH
‡ 0LQLPXPLQFRPHRI50SHUDQQXPDQGPHHWVRWKHUUHTXLUHPHQWVVHWE\WKHEDQN
‡ 5HTXLUHVVDODU\VOLSRUVXSSRUWLQJGRFXPHQWV

Credit card users must comply with the obligations as a credit card user when signing the credit
card application form.

‡ 'RQRWJLYHFUHGLWFDUGGHWDLOVWRVWUDQJHUV
‡ 5HPHPEHUWKHSLQQXPEHUDQGGRQRWUHFRUGWKHSLQQXPEHURQWKHEDFNRIWKHFDUG
‡ &KHFNWKHWUDQVDFWLRQVLQWKHFUHGLWFDUGVWDWHPHQWUHFHLYHGDWWKHHQGRIWKHPRQWK

75
 What do you understand about the impact of minimum LEARNING
payment and late payment on credit card use? STANDARD
Investigate and describe
7KHFUHGLWFDUGKROGHUZLOOUHFHLYHD¿QDQFLDOVWDWHPHQWIRUWKHFUHGLW the impact of minimum
FDUGPRQWKO\,QWKHVWDWHPHQWWKHUHDUHGHWDLOVVXFKDVFUHGLWOLPLW and late payments for
credit card usage.
VWDWHPHQW GDWH ODWHVW DPRXQW PLQLPXP SD\PHQW DPRXQW W\SH RI
charges and so on.
The cardholder should pay the statement balance immediately so
TIPS
WKDW QR ¿QDQFLDO FKDUJHV DUH LQFXUUHG %XW EDQNV SURYLGH ÀH[LELOLW\
The credit cardholder must
E\DOORZLQJXVHUVWRSD\LQDJLYHQSHULRGNQRZQDVWKHLQWHUHVWIUHH pay the full statement
period. Usually this period is 20 days from the statement date. balance of the credit card
 7RHQMR\WKLVSULYLOHJHHYHU\PRQWKWKHFDUGKROGHUPXVWSD\WKH to enjoy a 20-day interest
free period from the
3

total balance of credit card statement or make a minimum payment in statement date.
CHAPTER

the interest free period. The minimum payment is usually 5% of the

However, if you pay only
WRWDOEDODQFHRIWKHFUHGLWFDUGVWDWHPHQWRUDPLQLPXPRI50
part of it, you will lose the
 ,IWKHUHLVVWLOODEDODQFHRIWKHODWHVWDPRXQWXSRQH[SLU\RIWKH interest-free period.
LQWHUHVWIUHHSHULRGD¿QDQFHFKDUJHRULQWHUHVWZLOOEHLPSRVHGRQ
the balance based on daily rate. Most banks charge an annual interest
rate of between 15% and 18%.
 ,QDGGLWLRQLIQRSD\PHQWLVPDGHZLWKLQWKHLQWHUHVWIUHHSHULRGWKHQWKHPLQLPXPODWHSD\PHQW
charge of RM10 or 1% of total outstanding balance as of the statement date will be charged.

Example 16

Encik Ahmad received his credit card statement for January 2019 from Bank Sentosa. The statement
VKRZVWKDW(QFLN$KPDGKDVDFXUUHQWDPRXQWRXWVWDQGLQJEDODQFHRI50,WLVDVVXPHG
that Encik Ahmad did not use his credit card in February.
(a) What is the minimum payment to be paid?
E ,IKHRQO\PDNHVDPLQLPXPSD\PHQWIRU-DQXDU\DQGWKHVWDWHPHQWGDWHLVGD\VIURPWKH
H[SLU\GDWHRIWKHLQWHUHVWIUHHSHULRGZKDWLVWKHEDODQFHVKRZQLQKLV)HEUXDU\VWDWHPHQW"
F ,IKHPLVVHGKLVSD\PHQWIRU-DQXDU\ZKDWLVWKHEDODQFHVKRZQLQKLV)HEUXDU\VWDWHPHQW"

Solution: TIPS
(a) Current amount = RM5 200 We should use credit
5
( )
5% of the current amount = —– × RM5 200 = RM260
100
cards wisely.

 7KLV DPRXQW H[FHHGV 50 WKXV WKH PLQLPXP SD\PHQW WR EH SDLG E\ (QFLN $KPDG LV
RM260.
E 2XWVWDQGLQJEDODQFH 50±50 50
 3HULRGVXEMHFWWR¿QDQFLDOFKDUJHV GD\V ÷ 365) year
 ,QWHUHVWFKDUJHG 50î>÷ 100) × (15 ÷ 365)] = RM36.54
&XUUHQWDPRXQW2XWVWDQGLQJEDODQFHLQ)HEUXDU\ 5050 50

76
 Chapter 3 Consumer Mathematics: Savings
and Investments, Credit and Debt

F 2XWVWDQGLQJEDODQFH 50
 3HULRGVXEMHFWWR¿QDQFLDOFKDUJHV GD\V ÷ 365) year
 ,QWHUHVWFKDUJHG 50× >÷ 100) × (15 ÷ 365)] = RM38.47

( )
Late payment charges = —– 1 î5050 50
100
&XUUHQWDPRXQWLQ)HEUXDU\ 505050 50

How do you solve problems involving the use of credit LEARNING

cards? STANDARD
Credit cardholders should be aware of the advantages and disadvantages Solve problems involving
the use of credit cards.
of credit cards. Several factors have to be taken into account before
XVLQJFUHGLWFDUGVVXFKDVWKHEDODQFHRIWKHH[LVWLQJOLPLWFXUUHQWFDVK

3
ÀRZDQGVRRQ

CHAPTER
Example 17
Ms Chin wants to buy a French made handbag online. She surfs the
,QWHUQHWDQG¿QGVWZRLQWHUHVWLQJSURPRWLRQV
(a) Company L in Singapore offers promotional price of SGD250. For SGD250
RUGHUVRXWVLGH6LQJDSRUH6*'VKLSSLQJFKDUJHVDSSO\
(b) Company V in Malaysia offers promotional price of RM799. Delivery is free for all orders to
local addresses.
Ms Chin intends to make payment by credit card and she understands that the bank will charge an
DGGLWLRQDORQHDFKWUDQVDFWLRQIURPDEURDG$VVXPHWKHFXUUHQWH[FKDQJHUDWHIRU0DOD\VLDQ
ringgit is
RM1 = SGD0.34
$VDZLVHFRQVXPHUZKLFKRIIHUVKRXOG0V&KLQFKRRVH"-XVWLI\\RXUFKRLFH
Solution:
Ms Chin should compare the actual price to be paid if buying from the two companies.
(a) Company L:
Promotional price = SGD250 × (1 ÷ 0.34) = RM735.29
Postal charges = SGD50 × (1 ÷ 0.34) = RM147.06
1
( )
Additional charges by bank = RM735.29 × —– = RM7.35
100
 $FWXDOSULFHWREHSDLG 505050 50

(b) Company V:
Promotional price = RM799
Actual price to be paid = RM799
$OWKRXJKWKHSURPRWLRQDOSULFHRIIHUHGE\&RPSDQ\/LVFKHDSHUEXWWKHDFWXDOSULFHSD\DEOHLV
KLJKHUGXHWRWKHDGGLWLRQDOFKDUJHVLQFXUUHGIRURQOLQHSXUFKDVHVIURP&RPSDQ\/6R0V&KLQ
should buy from Company V to save RM90.70.

77
 How do you calculate loan repayment and instalment? LEARNING
STANDARD
Each loan will be charged interest on the loan from the date the loan Calculate the total
was released to the borrower. There are two calculation methods for amount of loan
ORDQLQWHUHVWQDPHO\ÀDWLQWHUHVWUDWHDQGLQWHUHVWRQEDODQFH repayment and
instalment, with various
Total loan balance is the amount deducted from the initial down
interest rates and
payment plus the amount of interest charged. different loan periods.
The monthly instalment is the total amount paid by the borrower to
the bank every month to settle the balance of the loan.

Flat interest
3

,QWKHÀDWLQWHUHVWPHWKRGWKHLQWHUHVWUDWHZLOOEHFDOFXODWHGRQWKHRULJLQDOORDQDPRXQWRYHUWKH
CHAPTER

WHUPRIWKHORDQ6RWKHDPRXQWRILQWHUHVWFKDUJHGSHUPRQWKLV¿[HG

Example 18
Mrs Lim bought a car worth RM80 000 on credit. She pays 10% down payment and the balance
LVSD\DEOHLQLQVWDOPHQWVRYHU\HDUV7KHÀDWLQWHUHVWUDWHLPSRVHGE\WKHEDQNLVSHUDQQXP
What is the amount of repayment and monthly instalment payable by Mrs Lim?
Solution:
Loan amount = Purchase price – down payment
= RM80 000 – RM8 000 = RM72 000
4
,QWHUHVWIRU\HDUV  50î²±î\HDUV 50
100
Total repayment can be calculated
7RWDOUHSD\PHQW  5050 50 with the formula A = PPrt
RM89 280
Monthly instalment = ————– = RM1 240 per month
72 months

Example 19
(QFLN$]ODQREWDLQHGDSHUVRQDOORDQRI50IURP%DQN0XOLDZLWKDQLQWHUHVWUDWHRI
per annum. The repayment period is 7 years.
:KDWLVWKHPRQWKO\LQVWDOPHQWWREHSDLGE\(QFLN$]ODQ"
Solution:
A = P Prt
/RDQP = RM10 000 7KXVWRWDOUHSD\PHQW
4
r = 4%
t = 7 years (
A 50 RM10 000 × —– × 7
100 )
 5050
= RM12 800
RM12 800
Monthly instalment = ————– = RM152.38
84 months

78
 Chapter 3 Consumer Mathematics: Savings
and Investments, Credit and Debt

Interest on balance
,QDGGLWLRQWRWKHÀDWLQWHUHVWEDQNVDOVRRIIHULQWHUHVWRQEDODQFHIRUFHUWDLQW\SHVRIORDQV,QWKH
LQWHUHVWRQEDODQFHPHWKRGWKHDPRXQWRILQWHUHVWFKDUJHGHDFKPRQWKRQWKHORDQGHSHQGVRQWKH
DPRXQWRIWKHORDQEDODQFHIRUWKDWPRQWK6LQFHWKHUHLVPRQWKO\LQVWDOPHQWSD\PHQWWKHDPRXQW
RIWKHORDQEDODQFHZLOOEHUHGXFHGWKXVWKHDPRXQWRILQWHUHVWIRUHDFKPRQWKZLOODOVREHUHGXFHG
+RZHYHULWVKRXOGEHQRWHGWKDWIRUHYHU\LQVWDOPHQWSDLGHDFKPRQWKWKHSULRULW\LVJLYHQWRVHWWOH
WKHLQWHUHVWDPRXQWLQWKDWPRQWKDQGWKHQWKHEDODQFHLVXVHGWRVHWWOHWKHRXWVWDQGLQJEDODQFHRI
the loan amount.

Example 20

3
(QFLN+DULWKREWDLQHGDSHUVRQDOORDQRI50IURP%DQN0XOLDZLWKDQLQWHUHVWUDWHRI

CHAPTER
on the balance. The repayment period is 7 years while the monthly instalment is RM150.
&DOFXODWHWKHWRWDODPRXQWRILQWHUHVWSD\DEOHE\(QFLN+DULWKIRUWKH¿UVWWKUHHPRQWKV
Solution:
First month
6 1
First month interest = RM10 000 × —– × —
100 12
= RM50.00
Scan the QR Code or
/RDQDWWKHHQGRI¿UVWPRQWK 5050 visit http://bukutekskssm.
= RM10 050 my/Mathematics/F3/
Chapter3InterestRate
%DODQFHDIWHU¿UVWLQVWDOPHQW 50±50
Calculation.pdf for more
= RM9 900 information about loan
Second month ZLWKÀDWLQWHUHVWDQG
Balance of the loan at the beginning of second month = RM9 900 interest on debts.
6 1
Second month interest = RM9 900 × —– × —
100 12
= RM49.50
/RDQDWWKHHQGRIVHFRQGPRQWK 5050
= RM9 949.50
Balance after second instalment = RM9 949.50 – RM150
= RM9 799.50
Third month
Balance of the loan at the beginning of third month = RM9 799.50
6 1
Third month interest = RM9 799.50 × —– × —
100 12
= RM49.00
/RDQDWWKHHQGRIWKLUGPRQWK 5050
= RM9 848.50
Balance after third instalment = RM9 848.50 – RM150
= RM9 698.50
7RWDOLQWHUHVWIRUWKH¿UVWWKUHHPRQWKVLV505050 50

79
 How do you solve problems involving loans? LEARNING
STANDARD
Solve problems involving
loans.
Example 21
Ameera wants to buy a car and has paid a deposit of RM4 800. The balance will be settled through
a vehicle loan.

RM48 000
3

State the advantages and disadvantages of the vehicle loan chosen by Ameera.
CHAPTER

Solution:
Advantages
‡ 5HSD\PHQWRIYHKLFOHORDQLQPRQWKO\
instalments allows Ameera to own the car.
‡ 'RHVQRWUHTXLUHDOXPSVXPSD\PHQW
Disadvantages
‡ 7KHFDUZLOOEHUHSRVVHVVHGLI
instalments are not made.
‡ 7KHWRWDODPRXQWRIUHSD\PHQWLVKLJK
due to interest charged on the loan.

Example 22 TIPS
0U9LQFHQWLVDWHDFKHUZLWKDPRQWKO\LQFRPHRI50+HGHFLGHV Do not borrow money
WR EX\ D QHZ FDU WR FRPPXWH WR ZRUN +H FRQWDFWV WZR EDQNV WR JHW from unlicensed
moneylenders as the
D ORDQ RI 50  ,Q DGGLWLRQ KH QHHGV 50 WR FRYHU RWKHU loan:
H[SHQVHVHYHU\PRQWK Ƈ ZLOOEHPDGHDFFRUGLQJ
The following are loan packages offered by two banks to Mr Vincent. to their own terms and
conditions.
Ƈ LPSRVHVYHU\KLJK
Loan details Bank A Bank B interest charges which
is compounded daily.
Loan amount RM40 000 RM40 000 Ƈ H[SRVHV\RXDQG\RXU
family to danger if you
Payment period 9 years 6 years make late payment.
Ƈ IRUFHV\RXWRPDNH
,QWHUHVWUDWH 4.5 % 5%
an additional loan to
Guarantor 1RWUHTXLUHG Required repay previous loan.

Suggest to Mr Vincent which bank is better suited for his car loan. State your reasons.

Solution:

Understanding the problem Planning a strategy

The amount of monthly instalments ‡ &DOFXODWHPRQWKO\LQWHUHVW
payable by Mr Vincent provided that it is ‡ &DOFXODWHPRQWKO\LQVWDOPHQWSD\DEOH
not burdensome.

80
 Chapter 3 Consumer Mathematics: Savings
and Investments, Credit and Debt

Implementing the strategy

The amount of money repaid The amount of money repaid
to Bank A to Bank B
A = PPrt A = PPrt
A 5050î²±î 4.5 5
A 5050î²±î
100 100
Total money = 5050
Jumlah bayar balik
   money  5050
Total
repaid = RM 56 200 repaid = RM52 000
RM56 200
Monthly instalment = ————–– RM52 000
108 months Monthly instalment = —————
72 months
=RM520.37

3
= RM722.22

CHAPTER
Making a conclusion
Mr Vincent should choose Bank A because the monthly instalment for Bank A is lower and less
EXUGHQVRPHWRKLP+RZHYHUGLIIHUHQWSD\PHQWWHUPVUHVXOWLQGLIIHUHQWDPRXQWRILQWHUHVWWKDW
ZLOOEHSDLG7KHUHIRUH0U9LQFHQWFRXOGDOVRFKRRVH%DQN%DVWKHWRWDOLQWHUHVWSDLGZLOOEH
less for Bank B.

Dynamic Challenge

Test Yourself
1. What is savings?
2. 6SHFLI\IHDWXUHVUHODWHGWR)L[HG'HSRVLW$FFRXQW
3. Encik Lipong deposits a sum of RM8 000 into Bank Pantas with an interest rate of 4% over 2
years. What is the amount of savings at the end of the second year?
Skills Enhancement
1. +RZFDQFRVWDYHUDJLQJVWUDWHJ\KHOSDQLQYHVWRU"
2. ([SODLQWKHPHDQLQJRILQYHVWPHQWLQUHDOHVWDWH
3. 7KHIROORZLQJFRQYHUVDWLRQLVEHWZHHQ5DPHVKDQG,VPDLOUHJDUGLQJWKHSXUFKDVHRIVKDUHV

Ramesh, I have That's great!

just bought You will get
shares of returns from your
BHP Berhad. investment.

 ([SODLQWKUHHW\SHVRIUHWXUQWKDWZLOOEHUHFHLYHGE\,VPDLO
4. The following are two types of investments.
Lee Chong bought 3 000 units of Mokhtar bought 3 000 000 units of unit trusts.
shares of a public limited company.
 ([SODLQWKHWZRGLIIHUHQFHVEHWZHHQWKHWZRW\SHVRILQYHVWPHQWVDERYH

81
 5. (QFLN6KDKZDQWVWRGHSRVLW50LQWRD¿[HGGHSRVLWDFFRXQWIRUPRQWKV
 7KHIROORZLQJDUHWKH¿[HGGHSRVLWLQWHUHVWUDWHVIRUGLIIHUHQWWHUPVRIIHUHGE\DEDQNWR(QFLN
Shah.
Duration Annual interest rate
1 month 3.0
3 months 3.5
6 months 3.75
9 months 4.00
12 months 4.25
Calculate the amount of interest that will be received by Encik Shah if he is saving for a
9-month term.
6. ,Q(QFLN=DLQDOKROGVXQLWVRIVKDUHVRI6\DULNDW9LVLRQ6GQ%KGZKLFKLVZRUWK
3

50SHUVKDUHXQLW'XULQJWKH\HDUWKHFRPSDQ\GHFODUHGDGLYLGHQGDQGDERQXVLVVXHDW
CHAPTER

QHZVKDUHIRUVKDUHXQLWVKHOG$WWKHHQGRIWKHVKDUHSULFHURVHWR50SHUXQLW
Calculate
(a) the amount of dividend received by Encik Zainal
(b) the number of bonus share units to be received by Encik Zainal
(c) the number of share units held by Encik Zainal after receiving the bonus shares
7. Complete the following table.
Deposit amount Flat interest Savings period Total interest
(RM) rate (years) accumulated
10 000 5% 2
5 000 1 150
4 000 6% 720

8. 0U .LVKHQGUDQ GHSRVLWV 50 LQWR D ¿[HG GHSRVLW DFFRXQW ZLWK  LQWHUHVW UDWH
compounded every 3 months for a period of 3 years. Calculate the amount of interest accrued
after the third year.

Self Mastery
1. 0U2VZDOG$OSKRQVXVERUURZHG50IURP%DQN<DNLQWRVWDUWDWDLORULQJEXVLQHVVLQ
5DZDQJ7KHEDQNFKDUJHVDÀDWLQWHUHVWUDWHIRUDUHSD\PHQWSHULRGRI\HDUV+RZPXFK
LQWHUHVWZLOOEHSDLGWRWKHEDQNE\0U2VZDOG$OSKRQVXV"
2. 0UV (PLO\ )UDQFLV VDYHV 50  LQ D EDQN %\ WKH HQG RI WKH HLJKWK \HDU WKH PRQH\
FROOHFWHGDPRXQWVWR50,IWKHEDQNSD\VDQDQQXDOLQWHUHVWRIx% for a year and is
FRPSRXQGHGHYHU\PRQWKVFDOFXODWHWKHYDOXHRIx.
3. 3XDQ 1RUDLQL 0LWLV GHSRVLWV D FHUWDLQ DPRXQW RI PRQH\ LQWR KHU VDYLQJV DFFRXQW ZKLFK
provides an interest rate of 2% per annum and compounded quarterly. What is the initial deposit
PDGHE\3XDQ1RUDLQL0LWLVLIWKHPRQH\FROOHFWHGDWWKHHQGRIWKH¿IWK\HDULV50"
4. Puan Zaiton bought 1 000 share units of Syarikat Pelita Berhad at RM2.00 per unit. At the end
RIWKH\HDU6\DULNDW3HOLWD%HUKDGSDLGDGLYLGHQGRIVHQSHUXQLWWRDOOLWVVKDUHKROGHUV7KH
IROORZLQJ\HDU3XDQ=DLWRQVROGDOOWKHVKDUHVKHOGZKHQWKHVKDUHSULFHURVHWR50SHU
unit. Calculate the total return for Puan Zaiton.

82
 Chapter 3 Consumer Mathematics: Savings
and Investments, Credit and Debt

5. (
 QFLN,VNDQGDUWDNHVDSHUVRQDOORDQRI50IURP%DQN&HUJDVZLWKDQLQWHUHVWUDWHRI
4% per annum. The repayment term is for 10 years. What is the monthly instalment payable by
(QFLN,VNDQGDU"
6. Puan Balkis takes a personal loan of RM8 000 from Bank Sentosa with interest rate of 4% per
annum on the balance. The payback period is 4 years while the monthly instalment is RM110.
Calculate the amount of interest payable by Puan Balkis within 2 months.
7. 7KHIROORZLQJLVDSURPRWLRQDOOHDÀHWRIIHUHGE\6HQJ+RQJ&RPSDQ\
137.1 cm
GREAT DEALS!
hes Television

3
inc

CHAPTER
79.2 cm
60
Cash Price
RM4 000
Instalments
RM120 × 36

7KHIROORZLQJFRQYHUVDWLRQWRRNSODFHEHWZHHQ0DVQDK5DVDPDQG1DQDN$OLRQJDIWHUWKH\
VWXGLHGWKHSURPRWLRQDOOHDÀHWDERYH

Nanak Aliong, I want to buy a television as

advertised in the above leaflet in instalment
because I can only afford a low monthly
payment.

Masnah Rasam, I think it is better

for you to pay in cash rather than
instalment.

(a) What is your view on Masnah Rasam’s opinion?

(b) Calculate the amount of interest paid and the interest rate on this instalment payments.
 F ,I\RXZDQWWREX\DWHOHYLVLRQKRZZRXOG\RXSXUFKDVHLW"
8. Ms Kayal borrows from Bank Desa RMX with an interest rate of 5% per annum. The payback
SHULRGLV\HDUV,IWKHPRQWKO\LQVWDOPHQWSDLGLV50FDOFXODWHWKHDPRXQWRIPRQH\
borrowed by Ms Kayal.
9. 0U0XUXJDQKDVERUURZHG50IURP%DQN2UNLGIRUSHUVRQDOXVH+HZLOOUHSD\RYHU
years with a monthly instalment of RM320. Calculate the yearly interest charged by the bank.
10. Puan Sapiah borrowed RM12 000 from a bank with interest rate of 3% per annum for 5 years.
0HDQZKLOH3XDQ6KD¿TDK,UDERUURZVWKHVDPHDPRXQWRIPRQH\IURPDQRWKHUEDQNZLWKD
rate of 4.5% per annum for 5 years. Calculate and state the difference between the total interest
SDLGE\3XDQ6DSLDKDQG3XDQ6KD¿TDK,UD

83
 P R O J E C T

Assume that you have won RM1

PLOOLRQLQDSX]]OHFRQWHVW
1. State the way in which you will
invest the money.
2. ([SODLQZK\\RXFKRVHWKLVIRUP
of investment.
3
CHAPTER

CONCEPT MAP

Savings and Investments

Savings Investments

Savings )L[HG Unit Real

Deposit Current
Account Account Shares Estate
Account Trust

,QWHUHVW Return on investment

Simple Compound Capital

interest interest Rent
gain

Credit Debt

Credit card Loan

,QWHUHVW

Flat interest ,QWHUHVWRQGHEWV

84
 Chapter 3 Consumer Mathematics: Savings
and Investments, Credit and Debt

SELF-REFLECT

At the end of this chapter, I can:

1. Recognise various types of savings and investments.

2.
Perform calculations involving simple interest and compound interest for
VDYLQJVDQGKHQFHH[SODLQWKHLPSDFWRIFKDQJHVLQSHULRGUDWHRILQWHUHVWRU
return and compounding frequency on the future value of savings.

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factors that affect return on investments and its impacts.

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4. &RPSDUHDQGFRQWUDVWSRWHQWLDOULVNVUHWXUQDQGOLTXLGLW\RIYDULRXVW\SHVRI
savings and investments.
5. Calculate the average cost per share for the investment of shares using the ringgit
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6. Solve problems involving savings and investments.

7. ([SODLQWKHPHDQLQJRIFUHGLWDQGGHEWDQGKHQFHGHVFULEHWKHZLVHPDQDJHPHQW
of credit and debt.
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ways to use it wisely.
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card usage.

10. Solve problems involving the use of credit cards.

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interest rates and different loan periods.

12. Solve problems involving loans.

EXPLORING MATHEMATICS

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Agency (AKPK) website to calculate the required period and
the amount of interest payable to settle your credit card debt.

85