1.You purchase a RM1,000 asset for RM800.It pays RM60 a year for seven years at which time you receive the RM1,000 principal.Prove that the annual return on this investment is not 9 percent.

2.You invest RM1,000 a year for 10 years at 10 percent and then invest RM2,000 a year for an additional 10 years at 10 percent.How much will you have accumulated at the end of the 20 years.

3.You are promised R10,000 a year for six years after which you will receive RM5,000 a year for six years.If you can earn 8 percent annually, what is the present value of this stream of payments?

4.Suppose you purchase a home for RM350,000.After making a down payment of RM50,000, you borrow the balance through a mortgage loan at 8 percent for 20 years.What is the annual payment required by the mortgage?If you could get a loan for 25 years but had to pay 9 percent annually, what is the difference in the annual payment?

5.You are offered RM900 five years from now of RM150 at the end of each year for the next five years.If you can earn 6 percent on your funds, which offer will you accept?If you can earn 14 percent on your funds, which offer will you accept?Why are your answers different?