SMK AGAMA SHARIFAH RODZIAH

TELOK MAS , 75460 MELAKA

ADDITIONAL MATHEMATICS PROJECT 1//2012

NAME I/C NO CLASS TEACHER'S NAME

SITI NADHIRAH BINTI HISHAMUDDIN

5 IBNU SINA
MISS ONG SIEW CHOE

CONTENT
NO 1 2 3 4 5 6 7 8 9 10 11 CONTENT Acknowledgement Objectives Introduction Part 1 Part 2 Part 3 Futher Exploration Conclusion Reflection Attachment Reference PAGE

Acknowledgment
After weeks of struggle and hard work to complete assignment given to us by our teacher , Miss Ong Siew Choe , I finally did it within two weeks with satisfaction and senses of success because I have understood more deeply about the interest and investment more than before . I have to be grateful and thankful to all parties who has helped me in the process of completing assignment . It was a great experience for me as I have learnt to be more independent and to work as group . For this , I would like to take this opportunity to express my thankfulness once again to all parties concerned .

Firstly , I would like to thank my additional mathematics teacher , Miss Ong Siew Choe for patiently explain to us the proper and precise way to complete this assignment . With his help and guidance , many problems I encountered have been solved .

Besides that , I would like to thank my parents for all their support and encouragement which has given to me . In addition , my parents had given guidance on the methods to account for investment which have greatly enchanced my knowledge on particular area .

Last but not least , I would like to express my thankfulness to my cousin and friends who have patiently explained to me and did this project with me in groups.

Objectives

i. To apply and adapt a variety of problem-solving strategies to solve problems ii. To improve thinking skills iii. To promote effective mathematical communication iv. To develop mathematical knowledge through problem solving in a way that increases students interest and confidence v. To use the language of mathematics to express mathematical ideas precisely vi. To provide learning environment that stimulates and enhances effective learning vii. To develop positive attitude towards mathematics

Introduction
In finance unsecured debt refers to any type of debt or general obligation that is not collateralized by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation or failure to meet the terms for repayment .

In the event of the bankruptcy of the borrower , the unsecured creditors will have a general claim on the assets of the borrower after the specific pledged assets have been assigned to the secured creditors , although the unsecured creditors will usually realize a smaller proportion of their claims than the secured creditors .

In some legal systems , unsecured creditors who are also indebted to the insolvent debtor are able ( and in some jurisdictions , required ) to set - off the debts , which actually puts the unsecured creditor with a matured liability to the debtor in a pre-preferential position .

Also called signature loans or personal loans. These loans are often used by borrowers for small purchases such as computers, home improvements, vacations or unexpected expenses.

An unsecured loan means the lender relies on the borrower's promise to pay it back. Due to the increased risk involved, interest rates for unsecured loans tend to be higher. Typically, the balance of the loan is distributed evenly across a fixed number of payments; penalties may be

assessed if the loan is paid off early. Unsecured loans are often more expensive and less flexible than secured loans, but suitable if the lender wants a short-term loan (one to five years).

In the UK there are hundreds of different unsecured loans to choose from, so comparison tables have become a popular way of finding out about the different options available. In 2006, according to the Bank of England, 22% of UK households had some unsecured debt with a further 21% having both secured and unsecured debt.

MELAKA EDUCATION DEPARTMENT ADDITIONAL MATHEMATICS PROJECT WORK 1/2012

PART 1
Banks are always competing to give the best offer of loans to potential customers. a) Get personal loan brochures from at least three banks in home town . You can even get them from the internet . Construct a table of comparison between three brochures . Your table should include : Total loan Interest rate Monthly payment Years/months of loan

b) Find the meaning of the following terms i) ii) Interest rate Monthly payment

(a) Table of comparison between the banks :

Public Islamic Bank

CIMB Bank

Bank Islam

Total Loan

RM 100 000

RM 100 000

RM 100 000

Interest Rate

4.99 %

4.38 %

3.32 %

Monthly Payment

RM 1250

RM 1205

RM 1110.21

Years / Months of Loan

10 years / 120 months

10 years / 120 months

10 years / 120 months

(b) i. Meaning of Interest Rate

The rate charged or paid for using money. You are charged an interest rate when you borrow money and paid an interest rate when you loan money ( placing it in a savings or investment account is like a loan to the bank ) .With credit cards and loans , the interest rate directly influences the cost of borrowing . Lower interest rates mean you'll pay a lower cost , while higher interest rates mean a higher cost . You'll see the cost reflected in your finance charges . Interest rate is typically influenced by your credit score . Low credit scores lead to high interest rates and vise versa . Interest rates are typically expressed as an annual percentage rate -the yearly cost ( or benefit ) of borrowing ( or loaning ) money .

ii. Meaning of Monthly Installment

A fixed payment amount made by a borrower to a lender at a specified date each calendar month . Equated monthly installments are used to pay off both interest and principal each month , so that over a specified number of years , the loan is paid off in full .

PART 2
1) Encik Ahmad plans to take a personal loan of RM 100,000 for a duration of 156 months . As a friend of Encik Ahmad and by comparing the installment rates and the monthly installments from the three brochures , which bank would you suggest Encik Ahmad get his personal loan ? Give your reasons why .

As a friend of Encik Ahmad , I would suggest him to get his personal loan from Bank Islam based on the table that I have constructed to show the comparison between the three banks that I suggested to him to choose a personal loan if he plans to take a personal loan of RM 100000 for a duration of 156 months ( 13 Years )

Public Islamic Bank

CIMB Bank

Bank Islam

Total Loan

RM 100 000

RM 100 000

RM 100 000

Interest Rate

4.99 %

4.38 %

3.79 %

Monthly Payment

RM 1057

RM 1011

RM 956.53

So , based on the table above absolutely I would suggest Bank Islam to Encik Ahmad . This is because Bank Islam had the lowest installment rate that is 3.79 % . Besides that , Encik Ahmad also has to pay the monthly installments for the lowest payment among the CIMB Bank and Public Islamic Bank that is RM 956.53 . So , Encik Ahmad does not have to pay more payment as the money can be used for other expenses . So , that is why I suggested Encik Ahmad to choose the Bank Islam to take a personal loan because Bank Islam offered the best installment rate and the monthly payment among the other two bank .

PART 3
1) Find the number of months that Encik Ahmad would take to have paid at least RM 40,000

Formula : Installment x Months = Monthly Installment

RM 956.53 x Months = RM 40000 Months = RM 40000 RM 956.53 = 42 months

So , the number of months that Encik Ahmad would take to have paid at least RM 40000 is at least 42 months .

FUTHER EXPLORATION
Calculate how much would Encik Ahmad save if he makes the loan repayment in 10 years .

With Bank Islam , it only takes 3.32% of interest for 10 years loan . Thus, we can calculate the total amount needed to be paid .

Total amount = total loan + (interest x total loan x years of loan) = 100,000 + (3.32% x 100,000 x 10) = RM133,200 Monthly instalment = 133,200 120 = RM1,110

Total amount = 100,000 + (3.79% x 100,000 x 13) = RM149,270 Monthly instalment = 149,270 156 = RM956

Based on the calculation, the total amount needed to be paid back is RM133,200 and the monthly instalment is only RM1,110. If compared to the 13 years loan, the total amount that should be paid back is RM149,270 and the monthly instalment is RM956. By taking the loan for 10 years, Encik Ahmad would save RM16,070 which is a large amount of money. Even though he has to pay a bit higher for the monthly instalment, it is still affordable. Moreover, he only needs to pay back in 10 years and he can save more money.

Conclusion

If you need additional funds for any reason, a Commonwealth Bank personal loan can be customised to suit your needs. You can borrow from $5,000 to $50,000 and pay it weekly, fortnightly or monthly over a loan term from one year up to seven years. This can be a much faster way to cover your costs than adding them to your home loan.

Our personal loans have lower interest rates and monthly fees than many credit cards, store cards and other lending schemes so it can be a more cost-effective and manageable way to get the things you want.

If you choose a fixed interest rate, youll know exactly how much you have to pay each month. If you choose a variable rate, youll be able to make extra repayments at any time you have some spare cash without incurring a fee and you can benefit from potential rate decreases. Because your loan is unsecured, assets such as your home are not at risk.

Reflection

Apart from that , this project encourages the student to work together and share their knowledge. It is also encourage student together information from the internet, improve thinking skills and promote effective mathematical communication. Not only that , I had learned some moral values that I practice. This project had taught me to responsible on the works that are given to me to be completed. This project also had made me felt more confidence to do works and not to give up easily when we could not find the solution for the question. I also learned to be more discipline on time, which I was given about 3 weeks to complete this project and pass up to my teacher just in time. I also enjoy doing this project and it had tighten our friendship . Last but not least, I proposed this project should be continue because it brings a lot of moral value to the student and also test the students understanding in Additional Mathematics .

REFERENCE
http://en.wikipedia.org/wiki/Interest_rate http://www.investopedia.com/terms/i/interestrate.asp#axzz1wDzB4oN7 http://www.investorwords.com/2539/interest_rate.html http://www.investopedia.com/terms/e/equated_monthly_installment.asp Dictionary of Banking, G Klein New Oxford English-English-Malay Dictionary, Oxford Fajar Bank Islam CIMB Bank Public Islamic Bank