1. Melia wanted to retire within the next 25 years. After his retirement, he would like to withdraw RM50,000 every year for the next 15 years until he passed away. Also, by the time of his death, he would like to bequeath RM2 Million to his grandchildren. Assuming the interest rate from now until his retirement is 6% and after retirement until he pass away is 8%.

Calculate how much he needs to save beginning of each year until his retirement so that he is able to meet his objective of withdrawing after retirement and bequeathing when he passed away?

(7 marks)

2. Ali is hoping to invest in project, but he is not sure which project gives him the best return. The first one he is hoping to invest RM500,000 and he expect to earn a return of RM150,000, RM200,00, RM2000,000 and RM150,000.

The second one, he expects that by investing RM400,000, he can earn each year RM150,000 for the next three years.

The third one, is he expect to invest RM360,000 now, but will earn a return of RM200,000, RM150,000, RM 50,000, and RM75,000 in the first, second, third and fourth year, respectively.

Which of these provides the best return for Ali? (6 marks)