Question: Question 1 a. Differentiate between future value and present value. b. Nuradawiyah has just graduated from Debra University with a chancellor award. Her parents wanted
Question 1 a. Differentiate between future value and present value. b. Nuradawiyah has just graduated from Debra University with a chancellor award. Her parents wanted to give her a present, but she must choose her presents from the two options: Option 1: RM8,000 cash, deposited for 10 years into saving accounts paying 10% interest. Option 2: RM8,000 cash, deposited for 10 years into saving accounts paying 10% interest compounded semiannually. Based on the above information you are required to: i. calculate the value of each option. ii. Based on your answer in part (i), which option is BEST for Nuradawiyah to choose from. Explain your answer. c. Nuradawiyah receives RM25,000 from his grandfather and places it in a saving account paying an annual compound interest of 8% for 3 years and then move it into a saving account that pays 10% interest compounded annually. How much will her money grow at the end of 6 years? (7 Marks) This is for principles of finance BBA class
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
