MAT037

Presentation
Presentation for week 13 of MAT037
Case Study 1 : Compound Interest
Miss Farah deposited RM25,000 at AFIF Bank which charges an interest rate of 5.5% compound
quarterly

a) Calculate the total amount of her money at the end of five years and seven months

P = 25,000 t = 5,7,12 k = 0.055 m=4

FORMULA : S = P (1+i) ^n where i = k ÷ m and n=mxt

25,000 ( 1 + 0.055 ÷ 4)^(4) (5,7,12)

= 33915.32
b) Calculate the total interest received

Formula Interest I = S – P

S = 33915.32 P = 25000.00

33915.32
-25000.00
8915.32

Interest amount = RM8915.32

c) If ADANI Bank offers an interest rate of 5.2% compound annually, calculate the total
amount she will have at the end of five years and seven months. Which bank gives the better
offer?

P = 25,000 t = 5,7,12 k = 0.052 m=2

FORMULA : S = P (1+i) ^n where i = k ÷ m and n=mxt

25,000 ( 1 + 0.052 ÷ 1 )^ (1)(5,7,12)

= RM 33298.05
AFIF Bank = RM 33298.05
ADANI Bank = RM 33178.84
Clearly, AFIF Bank has the better offer.
 Case Study 2 : Trade Discount
An owner of a pet shop received an invoice for the purchase of 200 bottles of shower gel at
RM15 each. He was offered trade discount of 10% and 6% .

a) Calculate the net price of 200 bottles of shower gel.

FORMULA : NP= LP (1-d1)(1-d2)

LP = 15 d = 10 and 6 = 0.1 and 0.06

NP= 15 (1-0.1)(0.06)

= 12.69

=12.69 multiply 200 = RM 2538

b) Find the total amount of discount of entire purchase .

FORMULA = D= LP x d

=200 x 15 = RM 3000

D = 3000 – 2538

D = RM 462
C) Find the list price of a shower gel if the price after 10% and 6% discount is
RM 12

NP = LP (1 – D1) (1 – D2)

12 = LP ( 1 – 0.1 ) (1 – 0.06)

12 = LP (0.846)

12/0.846 = LP

LP = RM 14.18
d) suppose that trade discount x% is given. Find the value of x if the net price
of a shower gel after x% is RM 14.40
TRADE DISCOUNT = x%
NP = 14.40
14.40 + 15 ( 1 – x )
14.40 = 15- 15x
15x = 15-14.40
15x = 0.6
X = 0.6/15
X = 0.04 , d = 0.04
= 4%