(a) Your company is aiming to increase its cash reserve for future development. Given the interest...

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(a) Your company is aiming to increase its cash reserve for future development. Given the interest rate of compound interest in a unit trust account is 5% per year, i) How much money should be deposited annually into the account if the company wish to have a total of RM500,000 cash reserve in the next 15 years? i) If the company decided to deposit RM30,000 per year into the account, how many years the cash reserve will reach RM500,000? ii) Calculate the difference of total dividend paid between the original saving plan (case in i) and the new saving plan (case in ii) for this loan. Give a comment on those differences. [9 Marks] [C01, PO11, С3] i) (2 marks) ii) years (3 marks) iii) Total dividend paid for case i: (1 mark) Total dividend paid for case ii : (1 mark) Differences : (1 mark) Justification : (1 Mark) (a) Your company is aiming to increase its cash reserve for future development. Given the interest rate of compound interest in a unit trust account is 5% per year, i) How much money should be deposited annually into the account if the company wish to have a total of RM500,000 cash reserve in the next 15 years? i) If the company decided to deposit RM30,000 per year into the account, how many years the cash reserve will reach RM500,000? ii) Calculate the difference of total dividend paid between the original saving plan (case in i) and the new saving plan (case in ii) for this loan. Give a comment on those differences. [9 Marks] [C01, PO11, С3] i) (2 marks) ii) years (3 marks) iii) Total dividend paid for case i: (1 mark) Total dividend paid for case ii : (1 mark) Differences : (1 mark) Justification : (1 Mark)

Answer rating: 100% (QA)

Solution Assumption It is assumed that amount is deposited at the beginning of every year i Interest ... View the full answer