CH 3 Savings & Investments, Credit and Debt
CH 3 Savings & Investments, Credit and Debt
CH 3 Savings & Investments, Credit and Debt
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CONTENT
CHAPTER 3
SAVINGS
AND
INVESTMENTS
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3. SAVINGS & INVESTMENTS, CREDIT & DEBT
Withdrawal of Anytime (ATM,debit card or online After the maturity date Anytime(Banking through Internet or
money banking) (3 mnth, 6 mnth, 9 mnth or 1 year) Telephone)
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3. SAVINGS & INVESTMENTS, CREDIT & DEBT
t=time in year
I = Interest MV = Mature Value ( Total Savings)
P=Principal (Initial savings) P=Principal (Initial savings)
r=Interest Rate ( given in % must be converted to r=Interest Rate ( given in % must be converted to r/100)
r/100) n= number of period interest is compounded per year
t=time in year t=tempoh dalam tahun
Menukar unit masa lain kepada tahun Number of period interest is compounded per year
t = time in year every 6 mnth => 12 ÷ 6 = 2 kali setahun
6 months = 6/12 once every 3 mnth => 12 ÷ 3 = 4 kali setahun
4 months = 4/12 once every 4 mnth => 12 ÷ 4 = 3 kali setahun
1 week = 1/ 52 = 7/365 once a mnth => 12 ÷ 1 = 12 kali setahun
3 days = 3/365 quarterly => 12 ÷ 3 = 4 kali setahun
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3. SAVINGS & INVESTMENTS, CREDIT & DEBT
2. SIMPLE INTEREST FORMULA WILL GIVE THE VALUE OF INTEREST RECEIVED WHEREAS
COMPOUNDED INTEREST FORMULA WILL GIVE THE VALUE OF TOTAL SAVINGS
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3. SAVINGS & INVESTMENTS, CREDIT & DEBT
Encik Shah wants to save RM10 000 in fixed Puan Emily saves RM10 000 in a bank. At the end of the eigth
deposit account for 9 months. Below are the year, her total saving is RM19 992.71.If the bank pays an annual
interest rates offered by a bank to Encik Shah interest of x% and compounded every 6 months. Find x.
1 months 3.0%
3 months 3.5%
6 months 3.75%
9 months 4.00% ÷10 000 ÷10 000
12 months 4.25%
Calculate the amount of interest Encik Shah will
receive if he is saving for 9 months term
Interest = Prt
= RM10 000 x 0.04 x 9/12 -1 -1
= RM300
2x x2
x = 0.08848
x in % 0.08848 x 100 = 8.8%
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CIKGU MAT SMK BANDAR SERI PUTRA
3. SAVINGS & INVESTMENTS, CREDIT & DEBT
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CIKGU MAT SMK BANDAR SERI PUTRA
3. SAVINGS & INVESTMENTS, CREDIT & DEBT
Ahmad bought 3000 unit of shares and Puan Siti invested in a company 3 000 unit of shares
received a dividend of RM600 after a worth RM2.00 per unit. After a year the company
DIVIDEND year. declared a dividend of 5%.
In the consequent year the company In the consequent year the company issues a bonus at
BONUS declared bonus share to the shareholder, one share per 2 unit shares held. Puan Siti will receive
SHARE Ahmad received bonus worth of RM1500 Number of Bonus Share = 3000/2 = 1500
Bonus Share = RM1500 Syer Bonus = RM2 x 1500 = RM3000
After a year, Puan Siti sold all her shares for RM2.20
Later, Ahmad sold all of his share and per unit. How much is Puan Siti’s capital gain?
CAPITAL received a capital gain of RM 900
GAIN Capital Gain = (RM2.20 - RM2.00) x 4500
Capital Gain = RM 900
= RM900
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CIKGU MAT SMK BANDAR SERI PUTRA
3. SAVINGS & INVESTMENTS, CREDIT & DEBT
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CIKGU MAT SMK BANDAR SERI PUTRA
3. SAVINGS & INVESTMENTS, CREDIT & DEBT
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CIKGU MAT SMK BANDAR SERI PUTRA
3. SAVINGS & INVESTMENTS, CREDIT & DEBT
K11: FACTORS 1) Return on REP Investments 2) Before Investing
3 factors that affect the return on 3 factors that should be considered by an investors before
investments for Real Estate Property investing are as follows:
● Risk Level - the possibility of losing/incurring loss in the
1. Location • REP located in urban investment
area has higher price in comparison to ● Return Level - high level of return is considered ideal
those located in rural areas ● Liquidity Level - how fast can an investment be turn to cash
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3. SAVINGS & INVESTMENTS, CREDIT & DEBT
● Bank Offers Credit Facility to ● an amount that has been ● Credit card users need to settle the
customers in the form of borrowed but has not been debt payment within the period
Credit Card settled stipulated by the bank to enjoy
● The base is if a customer use ● If a transaction is made using interest free period
the credit card in a a credit card,
transaction, ● the credit has been converted ● Pay the outstanding balance listed
● the bank will pay to the seller to debt on the credit card statement
● the customer will pay to bank ● The minimum amount paid by the
at a later period credit card holder provides
opportunity for the bank to charge
interest on the balance and may also
incur late payment charges
● Pay within the cash discount period
for payment of debts.
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3. SAVINGS & INVESTMENTS, CREDIT & DEBT
ADVANTAGES DISADVANTAGES
● Credit cardholders can enjoy a reward ● Incur charges such as
system in the form of cash rebate or point ●annual fees
redemption ●financial charge (interest)
●cash advance interest charges
● Does not require us to carry a lot of cash ●late payment charges
● Convenience of buying goods and services ● Some stores do not accept credit payment.
online.
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3. SAVINGS & INVESTMENTS, CREDIT & DEBT
K14: THE EFFECTS OF MINIMUM PAYMENT AND LATE PAYMENT OF CREDIT CARD
Card Credit user will receive a monthly
statement
Situation1 Situation 2 Situation 3
a) Minimum Payment = 5/100 x 5200 = RM260 (c) Outstanding balance = RM5 200
Period subject to financial charges
b) Outstanding balance = RM5 200 - RM260 = 15 days = (15 ÷ 365) year
= RM4 940
Period subject to financial charges Interest charged
= 15 days = (15 ÷ 365) year = RM5 200 x [(18 ÷ 100) x (15 ÷ 365)] = RM38.47
Interest charged = RM4 940 x [(18 100) x (15 ÷ 365)]
= RM36.54 Late payment charges
Current amount (Outstanding balance) in February = ( ) 100 x (RM5 200 + RM38.47) = RM52.38
= RM4 940 + RM36.54 = RM4 976.54
Current amount in February
= RM5 200 + RM38.47 + RM52.38 = RM5 290.85
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3. SAVINGS & INVESTMENTS, CREDIT & DEBT
Encik Azlan obtained a personal loan of RM Encik Harith obtained a personal loan of RM10 000 from Bank Mulia with
10 000 from Bank Mulia with an interest rate an interest rate of 6% on the balance. The repayment period is 7 years
while the monthly instalment is RM150. Calculate the total amount of
of 4% per annum. The repayment period is 7
interest payable by Encik Harith for the first three months.
years. What is the monthly instalment to be
paid by Encik Azlan? First month interest = RM10 000 x 6/100 x 1/12 = RM50.00
Loan at the end of first month = RM10000 + RM50 = RM10 050
Balance after first instalment = RM 10 050 - RM 150 = RM9 900
Total Repayment
A = P + Prt = Principal + Interest Second month Balance of the loan = RM9 900
P = RM10 000 r = 4% t = 7 years Second month interest = RM9 900 x 6/100 x 1/ 12 = RM49.50
Thus, total repayment Loan at the end of second month = RM9 900 + RM49.50
A = RM10 000 + (RM10 000 x 4/100 x 7) Balance after second instalment
= RM9 949.50 — RM150 = RM9 799.50
= RM10 000 + RM2 800
= RM12 800 Third month Balance of the loan = RM9 799.50
Third month interest = RM9 799.50 x 6/100x 1/12 = RM49.00
Monthly instalment Loan at the end of third month = RM9 799.50 + RM49.00 = RM9 848.50
Balance after third instalment = RM9 848.50 — RM150 = RM9 698.50
= RM12 800
84 months Total interest for the first three months is RM50.00 + RM49.50 + RM49.00
= RM152.38 = RM148.50
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