GROUP PROJECT

COURSE CODE: MAT112

LECTURER’S NAME: MADAM WAN NORLIZA BINTI WAN BAKAR

NAME NO. MATRICS

LUQMAN HAKIM 2024947275
MUHAMMAD ATIF AFIFIE 2023103643
MUHAMMAD AQID 2024947233
HAFSAH 2024947241
PART A
• 1. Define the meaning of compound interest and state examples where it can be applied.
- Compound interest computation is based on the principle that changes from time to time.
Interest that is earned is compounded or converted into principal and earns interest
thereafter. Hence, the principal increases from time to time.

Examples where it can be applied:

- Saving accounts, checking accounts and certificates of deposit (CDs)
- Student loans, mortgages and other personal loans
- Credit cards
2. Nani invested RM50,000 in a fund that pays interest of 4% compounded monthly t years ago.
Find t if the amount of the investment today is RM60,000.

S = RM60,000 P = RM50,000 r = 4% = 0.04 t=?

S = P (1+rt)
60000 = 50000 1 + (0.04)(𝑡)
60000 = 50000 ( 1.04t)
60000 = 52000t
60000 ÷ 52000 = t
t = 1.15384615
3. Muslim deposited Rm x in a bank that pays 2% compounded quarterly at the end of 4 years.
The amount in the account was RM10,000.

𝑘 2%
S = RM10,000 P=x i= = = 0.005 n = m × t = 4(4) = 16
𝑚 4
S = 𝑃( 1 + 𝑖 )𝑛
10,000 = 𝑥 ( 1 + 0.005 )16
10,000 = 𝑥 ( 1.083071151 )
10 ,000 ÷ 1.083071151 = x
x = RM9233.00
PART B
• 1. Define the concept of annuity and its implementation in everyday life.
- An annuity is a financial contract between an annuity purchaser and an insurance company.
The purchaser pays eiter a lump sum or regular payments over a period of time. In return, the
insurance company makes regular payments to the annuity owner, either immediately or
beginning at some point in the future.

Examples:
- Shop rentals
- Annual dividends
- Installment payments
2. Ani pays RM200 every month for her house rental for 5 years at 4% compounded monthly.
What is the sum of payment.
4%
m = 12 r = RM200 t = 5years n = 12 × 5 = 60 i=
12
( 1+ 𝑖 )𝑛 −1
S=R
𝑖
4%
( 1+ 12 )5 𝑥 12 −1
S = 200 4%
12
44.19931879
= 4%
12
= RM13259.80
3. Mama put RM50,000 in Allin’s account. How much money should she withdraw every 4
month for 4 years studying in Taylors college. The rate is 4% compounded quarterly.

𝑘 4%
S=𝒙 R = RM50,000 i= = = 0.01 n = m x t = 4 x 4 = 16 m=4 t=4
𝑚 4
1 − ( 1 + 𝑖 )−𝑛 )
A=R R = 50,000 ÷ 0.01 = 500
𝑖
1 − ( 1 + 0.01 )−16
50,000 = R 1 – 0.85282 = 0.14718
0.01
1 −( 1 + 0.01 )−16 500
50,000 = R R=
0.01 0.14718
1 −( 1.01 )−16
50,000 = R = RM3397.20
0.01
1 − 0.85282
50,000 = R
0.01
 THAT’S ALL FROM US

THANK YOU!