Chapter 2 TVOM

If you deposit RM1,000 each year in a savings account earning 4%, compounded annually, how much will you have in 10 years?

What is the present value of an investment that pays RM400 at the end of three years and RM700 at the end of 10 years if the discount rate is 5%?

What is the present value of RM400 to be received at the end of every year for 10 years, if the discount rate is 5% compounded annually?

Monaliza and Mazri want to buy a house. Their banker offered them a fully amortizing RM95,000 loan at a 12% annual rate for 20 years. What will their monthly payment be if they make equal monthly installments over the next 20 years.

You have borrowed RM170,000 to buy a Volkswagen Golf GTI car. You plan to make monthly payments over a 8-year period. The bank has offered you a 3% interest rate compounded monthly. Calculate the total amount of interest dollars you will pay the bank over the life of the loan. Round to the nearest dollar and assume beginning-of-month payments.

Congratulations. You just won the Power Root Millionaire Contest. The amount awarded is paid in 20 equal annual installments, at the beginning of each year. You can invest your money at 6.6%, compounded annually. You have calculated that the prize is worth RM20,975,400 today. How much was the amount awarded?