LIFE CYCLE COSTING

EXERCISE
1. Sr. Mohmad bought a property at a price of RM100,000 five years ago.
If the property put on sale now, what is the cost the Sr. Mohmad should
receive if the investment interest rate is 5% ?
RM 127 628. 16

2. What is the amount of interest earned by an investment of

RM15,000.00 at 7% interest rate for duration of ten years?
RM 14 507. 27

3. If RM 200,000 is invested an a unit trust fund at 10% interest, what is

the total investment at the 45th year?
RM 14, 578, 096. 74

4. En. Ismail is entitled to receive RM5,000.00 in five years’ time. What is

the present value of his entitlement if the capital can be invested at 7½
%?
RM 3 482. 79

5. Pn. Azura hopes to buy a car for RM150,000.00 in five years time. How
much money should she put a side now in order for her to own the car
if the investment rate is 10%?
RM 93 138. 20
6. Assuming that the management cost of a property covering taxes,
insurances and related maintenance amounts is RM5,000.00/per
annum over a five years period. How much should the owner gets back
from the original investment if the interest is 5%?
RM 27 628. 20

7. En. Danial invests RM5,000.00 at the end of every year at 8% interest.

How much interest is accumulated for this investment for the duration
of ten years?
RM 72 433. 00 (amount of 1 pa)

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8. A buyer has calculated the yearly maintenance expenditure of his shop-
house is RM1,500.00 for the next five years. How much does he need to
save now for him to fulfill this expenditure if the investment interest
rate is 8%?
RM 5.989.05 (present value of 1 pa)

9. Pn. Hasnah is entitled to receive RM10,000.00 per annum for the next
ten years from her savings in a unit trust fund. If the capital can be
invested at 8% rate, what is her entitlement value now?
RM 67 101. 00

10.Pn. Kaisara plans to extend her house ten years from now at an
estimated cost of RM50,000.00. If the capital can be invested at a rate
of 7%, what amount should be invested annually by her to meet this
future liability?
RM 3 618. 18

11.En. Ahmad wishes to allocate RM100,000.00 for his children’s education

expenses in eight years’ time. What is the yearly amount he needs to
provide now in order to fulfill this responsibility if it is invested at a rate
of 8%?
RM 9 401. 48

12.The price of a piece of land was RM200,000.00 ten years ago. If the land
is put on sale now, what will the price be if the compound interest rate
is 7%?
RM 393 430. 27

13.An investor bought property at a price of RM100,000.00 five year ago. If

the property is put on sale now, what is the cost the investor should
receive if the investment interest rate is 5%?
RM 127 628. 16

14.Dr.Nash plans to buy a house worth RM125,000.00 in six years’ time. He

also intends to expand this house at a cost of RM50,000.00, two years
after buying it. How much money should he set aside now to meet the
expenditure if the interest rate is 9%?
RM 99 626. 73

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15.RM10,000.00 is invested in a bank at the end of each year at 6½%
interest. What is the accumulated total after 20 years? What is the total
interest earned?
RM 388 253. 00/ RM 188 253. 00

16.En. Rosli bought a property at a cost of RM50,000.00 twenty years ago.

Since then he has been spending RM3,000.00 a year to pay all costs
pertaining to taxes, insurances and maintenance. If he plans to sell the
property now at an interest rate of 10%, what is its current value?
RM 508 200. 00

17.En. Nasa bought a house five years ago at a price of RM140,000.00. He

intends to renovate the house at a cost of RM10,000.00 in two years’
time and subsequently sells it out in five years’ time. Calculate the
selling price of the house if the interest rate is 6%?
RM 262 628. 84

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