Qt Assignment 1
Question 1
a) F = P(1+in) F = RM20000 [1+ (0.0325(20)] F = RM33000
b) F = P(1+i)n F = RM20000[ 1+(0.045/12)]20x12 F = RM49,109.33
c) P=R [ 1-1+i-ni 100,000= R [ 1-1+0.04512-20x120.045/12 R = RM 632.65 Payment for 20 years = RM 632.65 x 12 x 20 = RM 151,836 Earned = RM280,000 – RM151,836 – RM20,000 = RM108,164
Based on the result above, if the money that put in the present saving account will only bring return of RM33,000 . However, if the money is used to buy a house, then the profit from selling the house in 20 years is RM108,164. In my opinion, if money is to be put in the present saving account, the value of the money will not be the same as the inflation rate of the country will change. The value of money may become smaller in the future of 20 years. For the second investment, if the money is to invest in a company, no one knows what will happen to the company in the future of 20 years because we are not the one who controls the company. Many things could happen to the company that she invested in which causes her not to receive her dividend from the company. There will be also chances that she will lose her capital that she has invested. Therefore, I strongly recommend Ms. Tanya to use her capital to purchase a house. During the 20 years, she could rent her house out and receive rental payment. The rental payment she receives will increase if the property value increases in year by year. This will bring additional income other than selling the house. In addition, based on the inflation rate and blooming property prices, the house will be sure to sell out in the future. The total profit from the rental payment and the money received when the house is sold will be more than the value calculated. Therefore, by buying a house, Ms. Tanya could earn more profit that the two other ways.
Question 2 a) F =
a) F = P(1+in) F = RM20000 [1+ (0.0325(20)] F = RM33000
b) F = P(1+i)n F = RM20000[ 1+(0.045/12)]20x12 F = RM49,109.33
c) P=R [ 1-1+i-ni 100,000= R [ 1-1+0.04512-20x120.045/12 R = RM 632.65 Payment for 20 years = RM 632.65 x 12 x 20 = RM 151,836 Earned = RM280,000 – RM151,836 – RM20,000 = RM108,164
Based on the result above, if the money that put in the present saving account will only bring return of RM33,000 . However, if the money is used to buy a house, then the profit from selling the house in 20 years is RM108,164. In my opinion, if money is to be put in the present saving account, the value of the money will not be the same as the inflation rate of the country will change. The value of money may become smaller in the future of 20 years. For the second investment, if the money is to invest in a company, no one knows what will happen to the company in the future of 20 years because we are not the one who controls the company. Many things could happen to the company that she invested in which causes her not to receive her dividend from the company. There will be also chances that she will lose her capital that she has invested. Therefore, I strongly recommend Ms. Tanya to use her capital to purchase a house. During the 20 years, she could rent her house out and receive rental payment. The rental payment she receives will increase if the property value increases in year by year. This will bring additional income other than selling the house. In addition, based on the inflation rate and blooming property prices, the house will be sure to sell out in the future. The total profit from the rental payment and the money received when the house is sold will be more than the value calculated. Therefore, by buying a house, Ms. Tanya could earn more profit that the two other ways.
Question 2 a) F =