QUESTION 1 (25 marks) - Chapter 4 An engineering student bought a car at a local used car lot. Including tax and insurance, the total price was RM30000. He is to pay for the car in 12 equal monthly payments, beginning with the first payment immediately in other words, the first payment was the down payment). Nominal interest on the loan is 12%, compounded monthly. After six payments (the down payment plus five additional payments), he decides to sell the car. A buyer agrees to pay a cash amount to pay off the loan in full at the time the next payment is due and also to pay the engineering student RM10000. If there are no penalty charges for this early payment of the loan, how much will the car cost the new buyer? QUESTION 3 (25 marks) - Chapter 2 A firm is planning to manufacture a new product. The sales department estimates that the quantity that can be sold depends on the selling price. As the selling price is increased, the quantity that can be sold decreases. Numerically they estimate: P = RM35.00 -0.02Q where P = selling price per unit, Q = quantity sold per year. On the other hand, the management estimates that the average cost of manufacturing and selling the product will decrease as the quantity sold increases. They estimate C = RM4.00Q + RM8000 where C = cost to produce and sell Q per year The firm's management wishes to produce and sell the product at the rate that will maximize profit, that is, where income minus cost will be a maximum. What quantity should the decision makers plan to produce and sell each year? QUESTION 4 (25 marks) - Chapter 4 Mr. Pawzee withdrew RM10000 from a savings account and invested it in common stock. At the end of 5 years, he sold the stock and received a check for RM13070. If Mr. Pawzee had left his RM10000 in the savings account, he would have received an interest rate of 5%, compounded quarterly. Mr. Pawzee would like to compute a comparable interest rate on his common stock investment. Based on quarterly compounding, what nominal annual interest rate did Mr. Pawzee receive on his investment in stock? What effective annual interest rate did he receive? QUESTION 1 (25 marks) - Chapter 4 An engineering student bought a car at a local used car lot. Including tax and insurance, the total price was RM30000. He is to pay for the car in 12 equal monthly payments, beginning with the first payment immediately in other words, the first payment was the down payment). Nominal interest on the loan is 12%, compounded monthly. After six payments (the down payment plus five additional payments), he decides to sell the car. A buyer agrees to pay a cash amount to pay off the loan in full at the time the next payment is due and also to pay the engineering student RM10000. If there are no penalty charges for this early payment of the loan, how much will the car cost the new buyer? QUESTION 3 (25 marks) - Chapter 2 A firm is planning to manufacture a new product. The sales department estimates that the quantity that can be sold depends on the selling price. As the selling price is increased, the quantity that can be sold decreases. Numerically they estimate: P = RM35.00 -0.02Q where P = selling price per unit, Q = quantity sold per year. On the other hand, the management estimates that the average cost of manufacturing and selling the product will decrease as the quantity sold increases. They estimate C = RM4.00Q + RM8000 where C = cost to produce and sell Q per year The firm's management wishes to produce and sell the product at the rate that will maximize profit, that is, where income minus cost will be a maximum. What quantity should the decision makers plan to produce and sell each year? QUESTION 4 (25 marks) - Chapter 4 Mr. Pawzee withdrew RM10000 from a savings account and invested it in common stock. At the end of 5 years, he sold the stock and received a check for RM13070. If Mr. Pawzee had left his RM10000 in the savings account, he would have received an interest rate of 5%, compounded quarterly. Mr. Pawzee would like to compute a comparable interest rate on his common stock investment. Based on quarterly compounding, what nominal annual interest rate did Mr. Pawzee receive on his investment in stock? What effective annual interest rate did he receive