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TIME VALUE OF MONEYANSWER ALL THE QUESTIONS.
1. Your older sister deposited RM2,500 today at 6.5% interest for 15 years. However, you can only earn 6.25% interest. How much more money must you deposit today than your sister did if you are to have the same amount saved at the end of the 15 years?
2. You want to start a business that you believe can produce cash flows of RM5,600, RM48,200, and RM125,000 at the end of each of the next three years, respectively. At the end of three years you think you can sell the business for RM250,000. At a discount rate of 16%, what is this business worth today? 3. Fatini will receive RM7,500 at the end of Year 2. At the end of the following two years, she will receive RM9,000 and RM12,500, respectively. What is the future value of these cash flows at the end of Year 6 if the interest rate is 8%? 4. Aqil can afford RM240 a month for five years for a car loan. If the interest rate is 8.5%, how much can he afford to borrow to purchase a car? 5. Hadirah is retiring today and has RM96,000 in her retirement savings. She expects to earn 5.5%, compounded monthly. How much can she withdraw from her retirement savings each month if she plans to spend her last penny 18 years from now?