Anna plans to start her business by opening a bakery. To make her plan successful, she has begun saving her money. In the first year, she has saved RM 1,000. Then, the amount is increased to RM 2,000 on the second year and RM 5,000 for the third year. Then, RM 4,000 for each year from the fourth through the eighth. (a) Draw a cash flow diagram to represent her saving (b) If the interest rate is 20% per year, then calculate; (i) The present equivalent expenditure, P0; ( (ii) The future equivalent expenditure, F8; (iii) The annual equivalent expenditure, A
Anna plans to start her business by opening a bakery. To make her plan successful, she has begun saving her money. In the first year, she has saved RM 1,000. Then, the amount is increased to RM 2,000 on the second year and RM 5,000 for the third year. Then, RM 4,000 for each year from the fourth through the eighth. (a) Draw a cash flow diagram to represent her saving (b) If the interest rate is 20% per year, then calculate; (i) The present equivalent expenditure, P0; ( (ii) The future equivalent expenditure, F8; (iii) The annual equivalent expenditure, A
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Anna plans to start her business by opening a bakery. To make her plan successful, she has begun saving her money. In the first year, she has saved RM 1,000. Then, the amount is increased to RM 2,000 on the second year and RM 5,000 for the third year. Then, RM 4,000 for each year from the fourth through the eighth.
(a) Draw a cash flow diagram to represent her saving
(b) If the interest rate is 20% per year, then calculate;
(i) The present equivalent expenditure, P0;
(
(ii) The future equivalent expenditure, F8;
(iii) The annual equivalent expenditure, A
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