COURSEWORK 1. Find a) Exact time b) Approximate time, from 15 March to 29 August of the same year.

Number of days Month March April May June July August Total Exact time 16 30 31 30 31 29 167 Approximate time 15 30 30 30 30 29 164

2. Find the future value of $1000 which was invested for a) 4 years at 4% compounded annually, b) 5 years 6 month at 14% compounded semi annually, c) 2 years 3 month at 4% compounded quarterly, d) 5 years 7 month at 5% compounded monthly, e) 2 years 8 month at 9% compounded every two months, f) 250 days at 10% compounded daily.

Solution : (a) S = 1000 (1 + 4% (b) S = 1000 (1 + (c) S = 1000 (1 + (d) S = 1000 (1 + (e) S = 1000 (1 + (f) S = 1000 (1 + = RM1169.86 = RM2104.85 = RM1093.69 = RM1321.26 = RM1268.99 = RM1071.90

3. A debt of $7000 matures at the second year and another of $8000 at the end of six years. If the debtor wishes to pay his debt by maiking one payment at the end of the fifth year, find the amount he must pay if money is worth 6% compounded semi- annually Using a) The present as the focal date, b) The end of the fifth year as the focal date.

Solution
a) Let the payment be RM X Focal date

2 7000

4 X

6 8000

7 years

Formulating the equation of value at the focal date as shown, we get What is owed = What is owned X ( 1+ 3% = 7000( 1+ 3% X = 15899.13 + 8000 (1 + 3%

(b) Let the payment be RM X. Focal date

0 1 2 7000 3 4 5 X 6 8000 7 years

Formulating the equation of value at the focal date as shown, we get, What is owed = What is owned X= 7000 (1+3% = RM 15 899.13 + 8000(1+3%