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(a)Suzyros wants to buy a house but does not want to get a loan.The average price

By March 4, 2022No Comments

(a)Suzyros wants to buy a house but does not want to get a loan.The average priceof her dream house is RM500,000.and its price is growing at 5 percent per year.Compute how much should Suzyros invest at the end of each year for the next 5years to accumulate enough money to buy her dream house with cash at the endof the fifth year?Assume the investment pays a 12 percent rate of return.[5 marks](b)1Nico is 30 years old and will retire at age 65.He will receive retirement benefitsbut the benefits are not going to be enough to make a comfortable retirement lifefor him.Nico has estimated that an additional RM25,000 a vear over hisretirement benefits will allow him to have a satisfactory life.Compute how muchshould Nico deposit today in an account paying 6 percent interest to meet hisgoal?Assume Nico will have 15 years of retirement[5 marks](c)Thanos is the new assistant branch manager of a larger Penang-based bank andthe branch manager has asked him a question to test his knowledge.Thequestions are as follows:0)Which rate should the bank advertise on monthly-compounded loans.the nominal annual percentage rate or the effective annual percentagerate?[1 mark]间Which rate should the bank advertise on quarterly-compounded savingsaccounts?Elaborate your answer.[2 marks](ii)As a consumer,which rate would you prefer to see and why?[2 marks](d)Your current RM95,000 mortgage calls for monthly payments over 30 years atan annual rate interest rate of 6 percent If you pay an additional RM50 eachmonth beginning with the first payment,how soon do you pay off yourmortgage?

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