Question

a © 217 AT o Ⓡ 100% F ee QUESTION 2 Zahid Hasan is a young entrepreneur and had to deal with his financial decision for his retirements. As a financial consultant please help Zahid to analysis each case. a) Zahid Hasan want to have RM 0.5 million saved by the time he reaches age 30 and suppose that he is 20 years old today. If he can earn 5% on his investment funds, how much would Zahid have to invest today to reach his goal? b) If Zahid deposit RM 150 in an account that pays 5% interest compounder annually. how much will zahid have at the end of 10 years? 50 years? 100 years? c) How much would Zahid have to deposit in an account today that pays 12% interest compounded quarterly, so that he have a balance of RM 20.000 in the account at the end of 10 years? (6 MARKS)

Answer 1

A ois missions 50,0000 Given savings- No. of years f 10 (30-20) Rar of interest - 5% or 0.05 (1+2) . Future value = Principal X 50,0000 5 px (1+0.05) 5) p 30, 6959.66 10 years fra Principal (1 + rate of interest fua iso [1+0:09] 10 = 244.33 50 years -> Éva 150 [1 +0.05))0 1720:10 100 years =) fv = 150 [1toos] a 19725.is c) Given fu (furare Value) 20,000 since doing compounding quarterly ) 12 1 = 3% No of years (hoxe quarters) = 10 + 4 = 40 quarters. present value f/[ 1 + ] = 20000 1 + 0.03] 4° present value = Present Vaive 20000 3:2 62 - 613.4.