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Full name and IC No: TENG KUN SANG 001203-14-0703 Date:

Assignment (Asgmt) Declaration Form

Semester/Year 2/2021

Student’s Name TENG KUN SANG

Student’s ID No: 031210073

Course Code BBF201/03

Course Title INTRODUCTION TO FINANCIAL MANAGEMENT

Class Code 3-IFN3

Assignment No: Assignment 2

No. of pages of this

Assignment (including
this page)

Tutor SASIDHARAN A/L RAMAN NAIR

Course Coordinator MS TENGKU NUR SHAHRUL HIZAM BINTI TENKU IZHAM

T-DF Assignment Declaration Form (1/2020 version #003)

Question 1
 (a)

Option A:
Interest = RM 15,000 x 8% x 2 years
Interest = RM 2400
The total return = RM 15,000 + RM 2,400
= RM 17,400

Option B:
Compounded formula
FV = PV (1+i) n
Compounded Semi-annually formula
FV = PV (1+i/m) n x m

FV = RM 15,000(1+0.06/2) 2 x 2
FV = RM 15,000(1+0.03) 4
FV = RM 15,000(1.03) 4
FV = RM 16,882.63

Option C:
Compounded formula
FV = PV (1+i) n
Compounded fortnightly means that every 2 weeks.
365 Days / 14 times = 26.07142857 times
FV = PV (1+i/m) n x m

FV = RM 15,000(1+0.03/26.07142857) 2 x 26.07142857
FV = RM 15,000(1+0.03/26.07142857) 52.14285714
FV = RM 15,000(1.001150685) 52.14285714
FV = RM 15,927.00

Hence, I will advice Ridzuan make an investment on Option A, this is because Option A invest in a fund
that pays 8% simple interest for 2 years and it’s the highest return compare to option b and option c. Follow the
calculation above, Option A future value is RM 17,400 better than option b and option c.
(b)
 Saving accounts = RM 10,000
Interest rate = 8%
Time n = 10 years

FVn = PMT [(1+i) n -1] / i

FV10 = RM 10,000 [(1+0.08)10 -1] / 0.08

FV10 = RM 10,000 [(1.08)10 – 1] / 0.08

FV10 = RM 10,000 (1.158924997 / 0.08)

FV10 = RM 10,000 x 14.48656247

FV10 = RM 144,865.62

Accumulate sum = RM 144,865.62

(c)
Motor vehicle costs RM 20,000
10% as deposit = RM 20,000 x 0.1
= RM 2,000
Balance to be paid = RM 20,000 - RM 2,000
= RM 18,000
(i)
Compound interest formula
FV = PV(1+r) n
FV = RM 18,000(1+0.02)6
FV = RM 18,000(1.02)6
FV = RM 18,000 x 1.12162
FV = RM 20,270.92
The total amount of interest expense if the compound interest rate is 2% per month and total RM 20,270.92
need to pay after 6 month.

(ii)
Loan amortization schedule showed below
Month Beginning value Interest 2% Ending value
1 RM 18,000.00 RM 360.00 RM 18,360.00
2 RM 18,360.00 RM 367.20 RM 18,727.20
3 RM 18,727.20 RM 374.54 RM 19,101.74
4 RM 19,101.74 RM 382.03 RM 19,483.77
5 RM 19,483.77 RM 389.68 RM 19,873.45
6 RM 19,873.45 RM 397.47 RM 20,270.92

The total amount be paid for the vehicle is RM 2,000 deposit + RM 20,270.92 including interest after 6 months
= RM 22,270.92.

Question 3
(i)
Expected return for each of the stock.

Stock A
Return = 10% + 5% + 6% + 8% + 12% + 15%
= 56%
Average return = 56 % / 6 years
= 9.33%

Stock B
Return = 8% + 4% + 4.80% + 6.4% + 9.6% + 12%
= 44.8%
Average return = 44.8% / 6 years
= 7.47%

Stock C
Return = 5% + 10% + 12% + 10% + 6% + 6%
= 49%
Average return = 49% / 6 years
= 8.17%

(ii)
Formula for sample variance
S2 = Ʃ(