QUESTIONS 1. What is the relationship between discounting and compounding? (2 marks) 2. What is the relationship between the present value factor and the annuity present value factor? (2 marks) 3. A) What will RM5,000 invested for 10 years at 8% compounded annually grow to? (3 marks) B) How many years will it take RM400 to grow to RM1671 if it is invested at 10% compounded annually? (3 marks) C) At what rate would RM1,000 have to be invested to grow to RM4046 in 10 years? (3 marks) 4. Calculate the future sum of RM1,000 given that it will be held in the bank for 5 years and earn 10% compounded semi-anually. (3 marks) 5. What is an annuity due? How does this differ from an ordinary annuity? (2 marks) 6. What is the present value of an ordinary of RM1,000 per year for 7 years discounted back to the present at 10%? What would be the present value if it were an annuity due? (5 marks) 7. What is the future value of an ordinary annuity of RM1,000 per year for 7 years compounded at 10%? What would be the future value if it were annuity due? (5 marks) 8. What is the present value of a RM1,000 perpetuity discounted back to the present at 8%? (2 marks) [TOTAL: 30 MARKS]