(A) Jimmy Dean wanted to invest in gold now and the gold is expected to increase in value by 10 percent per year within the next 10 years. However, he does not have enough money and would like to borrow from his friend,Bijan. He promises to pav Bijan RM1,000 semi-annually beginning of each period for ten years. The prevailing interest rate for the next 10 years is at 6 percent per annum and compounded semi-annually?

Required :

(i) How much does Jimmy Dean borrow from Bijan now? (3 marks)

(ii) What is the value of gold in the next 10 years? (3 marks)

(B) Mc Gregor has just won a prize in a game show with the winning prize worth RM30 million. However, he was given two options to receive those prizes:

a. Option 1: Receive RM1 million for next 30 years beginning now.

b. Option 2: Receive RM1.5 million each year from year 1 until 10" year, RM500,000 from 11 to 20 years and RM1 million from 21 until 30 years.

Required :

(i) Suggest which of the two is the better option and assuming the interest rate at 7 percent for the next 30 years. (Please show your work). (4 marks)

(ii) If she is offered third options, which is to receive RM12 million one lumD Sum amount now. What is the rate of interest, that makes Mc Gregor indifferent to choose either option one or three (Show the answer to two decimal points)? (3 marks)

(C) Connor bought a pony for RM8,000 and need to borrow from HSBC bank at 4 percent. He will be making yearly instalment payment for the next three years.

Required :

(i) Calculate the yearly instalment he has to pay? (2 marks)

(ii) Based on the instalment, create an amortization schedule that also shows the amount of interest and principal amount that was being paid throughout the 3 years (5 marks)