Discuss the present value of an annuity due with an example

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Questions -

a) Why does money have a time value? Does inflation have anything to do with making a ringgit today worth more than a ringgit tomorrow?

b) Discuss the present value of an annuity due with an example.

c) If your parents deposited RM15,000 into an account for you when you were born as part of a college savings fund and that count is earning 10% annually, how much will you have in your college savings fund on your 18th birthday?

d) You have a long-term goal of paying off your school loans in five years. You will graduate with a loan debt of RM20,000 and an interest rate of 6%. How much will you need to pay each month to have the debt paid off in five years? (5 marks) e) Christina plans to contribute RM1,200 a year to her niece's college education. Her niece will graduate from high school in 10 years. If the interest rate is 6%, how much money does Christina need to save for her by the time she graduates from high school?

Reference no: EM132717096

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