EBE1133/EBQ1043 Mathematics of Finance (G04)

1. Joseph made a down payment of RM8000 for an automobile. He paid RM800 per month for 36 months with interest charged at 3.6% per year compounded monthly on the unpaid balance. What was the original cost of the car? (Rounded the answer to the nearest dollar)

• RM27261

• RM35262

• RM35261

• RM27262

Sarah plans to deposit RM1,000 and makes no withdrawals for 2 years. She wants to have a total amount of RM1,120 on deposit at the end of 2 years. What is the simple interest rate that the bank must pay per year for the deposit to yield the desired amount?

• 6%

• 6.5%

• 5.5%

• 7%

Find the accumulated amount after 2 years if RM1000 is invested at 8% per year compounded quarterly (rounded the answer to the nearest RM)

• RM1170

• RM1173

• RM1171

• RM1172

Find the accumulated amount after 2 years if RM1000 is invested at 8% per year compounded continuously. (Rounded the answer to the nearest RM)

• RM1175

• RM1174

• RM1173

• RM1172

Esther’s parents decide to deposit RM300 at the end of every month into a bank account paying interest at the rate of 6% per year compounded monthly, as a savings program for Esther’s college education. If the savings program began when Esther was 7 years old, how much money would have accumulated by the time she reaches 18? (rounded the answer to the nearest RM)

• RM55898

• RM55897

• RM55896

• RM55895

David borrowed RM350,000 from a bank to help finance the purchase of a house. The bank charges interest at a rate of 8% per year on the unpaid balance, with interest computations made at the end of each month. David has agreed to repay the loan in equal monthly instalments over 25 years. How much should each payment be if the loan is to be amortized at the end of the term? (rounded the answer to the nearest RM)

• RM2703

• RM2702

• RM2700

• RM2701

Harry borrowed $150,000 from a bank to help finance the purchase of a house. The bank charges interest at a rate of 11% per year on the unpaid balance, with interest computations made at the end of each month. Harry has agreed to repay the loan in equal monthly instalments over 30 years. How much should each payment be if the loan is to be amortized at the end of the term?

• $1432

• $1435

• $1433

• $1434

In common, sinking fund is set up for clearing a debt in future. $7.5 million worth of institute bonds which due in 32 years are engaged by an institution. In order to retire this debt, it formed a sinking fund (earns interest at the rate of 5.2% per year compounded monthly). What is the amount which have to be deposited monthly in this sinking fund?

• $7627

• $7626

• $7628

• $7625

Determine the annual percentage yield (APY) of interest corresponding to a nominal rate of 7.6% per year compounded quarterly

• 7.84%

• 7.85%

• 7.82%

• 7.81%

After 15 years of workings, Dickson decided to buy her dream car, BMW X6 Series model and come out with 2 plans. Dickson’s plan A: He planned to pay RM8000 per month for 75 months with interest charged at 9.5% per year compounded monthly on the unpaid balance. Before making the monthly payment, Daisy (Dickson’s spouse) supported him by paying RM300, 000 as down payment for the car.

a) Calculate the present value of annuity then compute the actual cost of the car. (Rounded to the nearest RM)

b) What is the entire amount of interest which had been charged?

• a) RM751,152, b)RM148,844

• a) RM751,150, b)RM148,848

• a) RM751,154, b)RM148,846

• a) RM751,155, b)RM148,845