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TUTORIAL 6 Review Questions

This document contains 8 practice questions about annuities and compound interest calculations. The questions involve calculating future and present values of investments with regular periodic payments and interest compounded monthly or quarterly. They also include calculations for loan and mortgage payments over terms of 15-25 years, as well as amounts needed to settle outstanding balances or arrears.

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SYARIFAH SARAH SYED ABDULLAH THANI
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46 views2 pages

TUTORIAL 6 Review Questions

This document contains 8 practice questions about annuities and compound interest calculations. The questions involve calculating future and present values of investments with regular periodic payments and interest compounded monthly or quarterly. They also include calculations for loan and mortgage payments over terms of 15-25 years, as well as amounts needed to settle outstanding balances or arrears.

Uploaded by

SYARIFAH SARAH SYED ABDULLAH THANI
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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TUTORIAL 2.

4: ANNUITY
REVIEW QUESTIONS

1. Segaran pays RM1,200 every four months in an investment scheme that pays at interest rate
of 9% compounded every four months. Find the future value of the investment if the term of
investment is 20 years. (RM195,664.12)

2. Adam deposited RM800 every month into an account at 6% compounded monthly. Find the
amount at the end of 12 years. (RM168,120.13)

3. Marianna borrowed RM100,000 at 4% compounded monthly. She has to repay the loan by
making 60 monthly payments.
a) Find her monthly payments. (RM1,841.65)
b) If she has not paid her first 15 monthly payments, how much should she pay on her
sixteenth payment to settle all outstanding arrears? (RM30,214.64)

4. Jenny purchases a piano for RM7,000. She pays a down payment of RM2,000 and agrees to
pay the balance in 15 equal monthly payments, the first due in one month. If the dealer
charges her 5% compounded monthly, find her monthly payment. (RM344.55)

5. Hashim is investing RM300 at the end of every three months in a scheme which pays 6%
compounded quarterly. The accumulated amount at the end of five years will be enough for
a down payment for a new house.
a) What is the value of this down payment. (RM6,937.10)
b) What will be the amount of interest earned in the scheme? (RM937.10)

6. Terrence buys a condominium for RM580,000 and he pays 10% down payment. The balanced
is to be paid in equal monthly instalments for 25 years. The first instalment is due one month
after the date of purchase and the interest rate is 4.8% compounded monthly.
a) Calculate the monthly payment. (RM2,991.04)
b) If Terrence fails to make the first four monthly payments, how much should he pay on
the fifth payment to settle all the outstanding arrears? (RM15,075.32)

7. Mr Rao buys an apartment for RM130,000 with a 20% down payment. He takes a loan from a
bank to settle the balance at an interest rate of 4.2% compounded monthly. He is required to
pay equal monthly payments for 20 years to settle the loan.
a) Calculate the monthly payment and the total interest charged. (RM641.23; RM49,895.20)
b) After paying for five years, Mr Rao decides to settle the loan. Calculate the outstanding
balance he has to pay. (RM85,525.80)

8. Nur Zaini borrows RM100,000 at 4% compounded monthly from a bank. She intends to settle
the loan by making 120 monthly repayments.
a) Find the monthly repayment. (RM1,012.45)
b) Calculate the total interest charged. (RM21,494.17)
c) Determine the fifth payment to settle all arrears if she has not paid the first four
repayments. (RM5,096.11)
d) If she decides to settle the loan after the ninetieth payment, calculate the amount she
needs to pay. (RM28,858.50)

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