LAI TSHUN KHONG JOSEPH TING SIONG YEU

COURSEWORK : NUMERICAL LITERACY

Case Study 1 Rahim has just completed his higher education and plans to buy a new car with his monthly salary of RM3000. He lives with his parents and plans to drive to work everyday. His total monthly expenditure is RM700 and he hopes to save 10% of his savings for his future plans. a) What loan schemes will you recommend Rahim and what price range car would you recommend him? b) What monthly budget proposal would you recommend Rahim to ensure that he completes paying for his car loan.

MONTHLY BUDGET PROPOSAL Rahim monthlys salary is RM 3000 Monthly Expenditure is RM700

No. Salary Expenditure Saving 10% RM3000 RM 700 3000 x 10%

=RM 300 2 3 4 5 6 House payment Fuel Entertainment Food Water & Electricity expenses Total Balance RM 300 RM 300 RM 100 RM 500 RM 100 RM2300 RM 3000-RM 2300
= RM700

PIE CHART
Column1

Saving Expenditure Rent Fuel Entertaiment Food

COMPARE AND CONTRAST FOR THE CAR LOAN

VIVA ELITE 1.0 (A) EZ METALLIC

PRICE (RM)

Deposit (RM)

Interest Rate

Duration (years)

42,725.50 42,725.50

525.50 525.50

4.00% 4.10%

7 9

INTEREST RATE ( %) = 4.00% DURATION ( YEAR ) = 7

INTEREST RATE ( %) = 4.10% DURATION ( YEAR ) = 9

INTEREST : RM 42,725.50 x 4.00% x 7 years = RM 11,963.14

INTEREST : RM 42,725.50 x 4.10% x 9 years = RM 15,774.94

REAL PRICE (INCLUDED INTEREST):

REAL PRICE (INCLUDED INTEREST):

RM 42,725.50 + RM 11,963.14
= RM 54,688.64

RM 42,725.50 + RM 15,774.94
= RM 58,500.44

MONTHLY INSTALMENTS:

MONTHLY INSTALMENTS:

RM 54,688.64 RM 525.50
(deposit)/84 months =RM644.80

RM 58,500.44 RM 525.50
(deposit)/108 months =RM536.81

COMPARING TO OUR SALARY: RM 3000 RM 644.80 = RM 2355.20

COMPARING TO OUR SALARY: RM 3000 RM 536.81 = RM 2463.19

BALANCE: SALARY EXPENSES CAR LOAN = RM 3000 RM2300 RM644.80 = RM 55.20

BALANCE: SALARY EXPENSES CAR LOAN = RM 3000 RM2300 RM 536.81 = RM 163.19

MYVI STD 1.3 SX METALLIC PRICE (RM) Deposit (RM) Interest Rate Duration (years)

46,124.20 46,124.20

1,024.20 1,024.20

4.00% 4.10%

7 9

INTEREST RATE ( %) = 4.00% DURATION ( YEAR ) = 7

INTEREST RATE ( %) = 4.10% DURATION ( YEAR ) =9

INTEREST : RM 46,124.20 x 4.00% x 7 years = RM 12,914.77

INTEREST : RM 46,124.20 x 4.10% x 9 years = RM 17,019.90

REAL PRICE (INCLUDED INTEREST):

RM 46,124.20 + RM 12,914.77 = RM 59,038.97

REAL PRICE (INCLUDED INTEREST):

RM 46,124.20 + RM 17,019.90 = RM 63,144.10

MONTHLY INSTALMENTS: RM 59,038.97 RM 1,024.20 (deposit)/84 months =RM 690.65

MONTHLY INSTALMENTS: RM 63,144.10 RM 1,024.00 (deposit)/108 months =RM 575.19

COMPARING TO OUR SALARY: RM 3000 RM 690.65 = RM 2309.35

COMPARING TO OUR SALARY: RM 3000 RM 575.19 = RM 2424.81

BALANCE:

BALANCE:

SALARY EXPENSES CAR LOAN SALARY EXPENSES CAR LOAN = RM 3000 RM2300 RM 690.65 = RM 9.35 = RM 3000 RM2300 RM575.19 = RM 124.81

RECOMMENDATION

After doing the compare and contrast to the two cars Myvi, and Viva Elite we finally choose Viva Elite as our choice to recommend it to Rahim. First,we look at how much the car would cost in monthly repayments over a period of seven and nine years assuming 4.00% and 4.10% interest rate. The two variants of car we using to compare here is MyVi STD 1.3 SX Metallic and Viva Elite 1.0 EZ Metallic. Then, we look at the three cars cost monthly. Over a 9-year loan which is the most people will choose. The difference in monthly repayment between Myvi and Viva is about RM 575.19 and RM 536.81respectively. For the first compare, we chose Viva as our first choice. The final balance after deducted the car loan for Viva is RM 163.19 and for Myvi is RM 124.81 . The interior length of Viva would be slightly longer than Myvi. Besides that, the fuel consumption of Viva is better than Myvi. In addition, the brake light of Viva is bigger than Myvi. Lastly, we recommend Rahim to buy Viva because he still has a balance of RM 163.19 after paying the car loans and expenses since he was just normally use it to drives to work everyday. The balance can be used up when there is any urgent happen.

THE END