Example TVM

1. A invests RM30,000 now, and RM6,000 each at the end of years

one, two and three in a bank at an interest rate of 6%. A
continues to keep the money in the bank for another seven
years, how much money was accumulated at the end of that
period?

2. A man wants to pay for his son’s college education by making

equal yearly payments of RM30,000 for four years. The son is
ten years old now, and the payment will begin at the end of
eighteen years. Draw the cash flow diagram, and calculate how
much should the man invest in a bank today at an interest rate of
6%.

3. A invest RM30,000 now, and RM20,000 each at the year ends

from year one to year seven in a bank at an interest rate of 15%.
If A continues to keep the money in the bank for another three
years, what is the future worth of the investment at the end of
that period?