Question
Give your answers in this question correct to the nearest whole number.
Shahid invested 25 000 Singapore dollars (SGD) in a fixed deposit account with a nominal
annual interest rate of 3.6 %, compounded monthly.
Calculate the value of Shahid’s investment after 5 years. [3]
At the end of the 5 years, Shahid withdrew x SGD from the fixed deposit account and
reinvested this into a super-savings account with a nominal annual interest rate of
5.7 %, compounded half-yearly.
The value of the super-savings account increased to 20 000 SGD after 18 months.
Find the value of x . [3]
Answer/Explanation
Ans:
(a)
\(FV=25000\times (1+ \frac{3.5}{100\times 12})^{12\times 5}\)
OR
N= 5
I%=3.6
PV= \(\mp 25000\)
\(P/Y\) = 1
C/Y = 12
OR
N= 60
I%=3.6
PV = \(\mp 25000\)
P/V = 12
C/Y = 12
FV=29922(SGD)
(b)
2000= PV\times \((1+\frac{5.7}{100\times 2})^{2\times 1.5}\)
OR
N= 1.5
I%=5.7
FV=\(\pm 20000\)
\(P/Y\) = 1
C/Y= 2
OR
N=3
I%= 5.7
FV = \(\pm 20000\)
P/V=2
C/Y = 2
X= 18383 (SGD)