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QUESTION 2 Analyse the below TWO scenarios and answer the questions accordingly: a. During your 25th birthday, your father had a surprise for you by

QUESTION 2

Analyse the below TWO scenarios and answer the questions accordingly:

a. During your 25th birthday, your father had a surprise for you by opening a saving accounts with a deposit of RM10,000. He intends to make nine more similar gifts each year. If the savings account pays 8% interest, how much you will have at the end of 10 years?

b. Your employer had announced a RM15,000 signing bonus as a reward of your working excellence and you have decided to invest it for 2 years. Your banker suggests two possible alternatives, which both require a commitment for the full 2 years. The first alternative will earn 8% per year for both years. The second alternative earns 6% for the first year and 10% for the second year. Interest compound annually. Which alternative will you choose? Why?

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