QUESTION 1

PLEASE DO IT ON A PAPER, I WILL APPRECIATE A CLEAR AND EXPLAINED ANSWER, THANK YOU.

a) Define annuity and provide TWO (2) examples of annuity. (4 marks) b) Find the future values and the interest earned for the following annuities: RM2,450 every 2 months for 1 year 8 months at 6% compounded every two (5 marks) months. c) Lina has to pay RM443.21 every month to settle loan of RM10,000 at 6% compounded monthly. Find the number of payments that he has to make. (4 marks) d) Ah Ming purchased a house costing $59500. He made a down payment of $6500. The balance was borrowed from ABC Corporation which charges 9% effective. To settle the loan, Ah Ming had to make equal monthly payments for 15 years. i. Show that the nominal rate compounded monthly that is equivalent to the effective rate above 8.65% (correct to 2 decimal places) (5 marks) ii. Find his monthly payment. (4 marks) iii. Find the total interest that he had to pay. (3 marks) iv. If ABC Corporation invested immediately all the monthly repayments in an account that pays 8% compounded monthly, find the profit made by the corporation at the end of the 15 years