1.

Based on the financial statements, compute June’s:

a. Basic Liquidity Ratio

3-6 month

b. Debt-to-Asset Ratio

<50%

c. Debt Service Ratio

<35%

d. Non-Mortgage Debt Service Ratio

<15%

e. Liquid-Assets-to-Net Worth Ratio

>15%

f. Savings Ratio

>10%

g. Net Investment Assets to Net Worth Ratio

 >50%

2. Lucas wants to know how much to invest now, if the annual interest rate is

I/Y = 7

P/Y = 12

N = 120

FV = 50,000

PV = 24879.81

3. How long does it take for RM5,000 to grow into RM6,724.44 at 10% compo

I/Y = 10

P/Y = 4

PV = -5,000

FV = 6,724.44

N = 3 years

4. What interest rate is implied if you borrow RM12,500 and repay RM21,362.

P/Y = 12

PV = 12,500

FV = -21362.24

N=3

I/Y = 18%

5. Kiki has just been paid RM400,000 by an insurer and intends to place the mo
I/Y = 6

P/Y = 1

PV = -400,000

FV = 1,000,000

N = 16 years

6. Patrick plans to place RM75,000 in a fixed deposit account with an interest r

The FD pays interest every quarter and the amount is re-deposited to earn inte

I/Y = 4

P/Y = 4

N = 10*4

PV = -75,000

FV = 111,665

7. David requires RM80,000 in 5 years’ time. He has placed his funds in a vehic

I/Y = 7.75

P/Y = 1

N=5

FV = 80,000

PV = 55,081

8. There are 2 investment plans, X and Y. Plan X involves setting aside RM500 a

If the rate of return is 9% a year compounded quarterly, which plan provides a

Mode: BGN

I/Y = 9

P/Y = 4
N = 10*4

PMT = -500

FV = 32,611

9. Jason plans to retire with an annual income of RM125,000 each year for a p

Compute the total fund required if the retirement fund is earning 5% at the dis

Mode: BGN

I/Y = 5

P/Y = 1

N = 25

PMT = 125,000

PV = 1,849,830

10. Assume that you plan to buy a condominium 5 years from now, and you es

You plan to deposit the money into the bank that pays 4% interest, and you wi

Mode: BGN

I/Y = 4

P/Y = 1

N=5

PMT = -2,500

FV = 14,082

11. Annual deposits of RM24,000 have been made at the beginning of each ye

i) 10% for the first five years

ii) 8% for the next five years

iii) 9% for the last ten years

i. Calculate the accumulated amount at the end of 20 years.

Mode: BGN

I/Y = 10

P/Y = 1

N=5

PMT = -24,000

FV = 161,174.64

ii. Calculate the total interest earned for the 20 years.

1,318,069.13 - (24,000 x 20) = 838,069.13

pute June’s:

= Cash & Cash Equivalent / Monthly Expenses

= (40,000+10,000) / (137,000/12)

4.38 months

= Debt / Asset

= (10,000+600,000+15,000) / 880,000

70%

= Annual Loan Repayment / Annual Net Income

= (36,000+18,000) / 144,000

38%

= Non Mortgage Loan Repayments / Annual Net Income

= (18,000) / 144,000

12.5%

= Liquid Asset / Net Worth

= (40,000+10,000) / (880,000-10,000-600,000-15,000)

20%

= Saving / Gross Income

= 7,000 / 144,000

4.9%

= Net Investment Asset / Net Worth

 = 350,000 / (880,000-10,000-600,000-15,000)

137%

t now, if the annual interest rate is 7% compounded on a monthly basis. He wants to have RM50,000 in 10 years time.

ow into RM6,724.44 at 10% compounded quarterly?

ow RM12,500 and repay RM21,362.24 in three years with monthly compounding?

n insurer and intends to place the money in a bond fund with an expected return of 6% a year. How long will it take for the sum to be R
ed deposit account with an interest rate of 4 % a year.

amount is re-deposited to earn interest. He wants to know how much money is available after 10 years.

e. He has placed his funds in a vehicle that generates an annual compounded rate of 7.75%. How much must he invest in a lump sum

lan X involves setting aside RM500 at the beginning of every quarter for 10 years. Plan Y requires an amount of RM 250 at the beginn

ded quarterly, which plan provides a higher future value?

I/Y = 9

P/Y = 4
 N = 20*4

PMT = -250

FV = 56,012

ome of RM125,000 each year for a period of 25 years.

rement fund is earning 5% at the distribution phase and the retirement fund starts immediately when Jason reached his retirement ag

inium 5 years from now, and you estimate that you can save RM2,500 per year.

nk that pays 4% interest, and you will make the first deposit at the beginning of each year. How much will you have after 5 years?

en made at the beginning of each year into the annuity policy fund for the last 20 years. During this period, the interest earned on the
e end of 20 years.

I/Y = 8 I/Y = 9

PV = -161,174.64 PV = -388,880.72

N=5 N = 10

PMT = -24,000 PMT = -24,000

FV = 388,880.72 FV = 1,318,069.13
it take for the sum to be RM 1 million?
t he invest in a lump sum now?

of RM 250 at the beginning of each quarter for 20 years.

reached his retirement age.

u have after 5 years?

he interest earned on the deposits was as follows: