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5) Simple interest versus compound interest Fist City Bank pays 7% simple interest on its savings account balances, whereas Second City Bank pays 7% interest

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5) Simple interest versus compound interest Fist City Bank pays 7% simple interest on its savings account balances, whereas Second City Bank pays 7% interest compounded annually. If you made a RM 5,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of 5 years? 6) Investment X offers to you RM 4,000 per year for nine years, whereas Investment Y offers to pay you RM 6,000 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 5%

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