(TIME VALUE OF MONEY)

QUESTION 1

a) Find the future value of RM100 deposit in the bank for ten (10) years if the interest rate to be earned is 5% per annum. (5 marks)

b) If you borrow RM100,000 at an annual interest rate of 10% and you must pay off the loan in ten (10) years. What is the required annual payment? (5 marks)

c) If you would like to accumulate RM 10,000 over the next five (5) years, how much you must deposit each year, given 7% interest rate. (5 marks)

d) A dollar received today is worth more than a dollar received one (1) year from today.

Explain this statement. (5 marks)