ADDITIONAL MATHEMATICS PROJECT WORK 1/2012 NAME : WAN MOHD AMIR FAQRY CLASS : 5 SC 1 IC NUMBER : 950302-04-5183 TEACHER : GAN

YOCK CHUAN SCHOOL : SMK BUKIT RAMBAI MELAKA

OBJECTIVES The aims of carrying this project works are : To apply and adapt a variety of problem-solving strategies to solve problems To improve thinking skills To promote effective mathematical communication To develop mathematical knowledge to problem solving in a way that increases student interest and confidence To use the language of mathematics to express mathematical ideas precisely To develop positive attitude towards mathematics

ACKNOWLEDGEMENT First and foremost I would like to thank God that finally, I have succeeded in finishing this project work. I would like to thank my beloved Additional Mathematics teacher, teacher Gan Yock Chua for all the guidance she had provided me during the process in finishing this project work. I also appreciate her patience in guiding me completing this project work. I would like to give a thousand thanks to my father and mother for giving me their full support in this project work, financially and mentally. They gave me moral support when I needed it. I would also like to give my thanks to my fellow friends who had help me in finding the information that Im clueless of and the time we spent together in study groups on finishing this project work. Last but not least, I would like to express my highest gatitude to all those who gave me the possibility to complete this task. I really appreciate all the help I got. Again, thank you very much.

CONTENTS NO CONTENT PAGE 1 OBJECTIVES 2 ACKNOWLEDGEMENT 3 INTRODUCTION

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. The most common types of loans come from bank which exists to lend money. So it not surprise that banks offer a wide variety of ways to fund a business growth. Heres look at how lenders generally structure loans with some common variations : 1. Line of credit loan : The most useful type of loans for a small business is the line of credit loan. This is a short term loans that extend the cash available in your businesss checking account to upper limit of the loans. 2. Balloons loans : These loans only the interest to be paid off during the life of the loan with the final balloon payment of the principal due to last day. 3. Interim loans : Interim financing is often used by contractors building new facilities. When the building is finished a mortage on the property will be used to pay off the interim loan. 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) Interest rate (ii) Monthly payment

Personal loans brochures/info Personal loan brochure from Bank Simpanan Malaysia (BSN) Personal loan brochure from AmIslamic Bank

Personal loan brochure from Bank Muamalat Personal loan info from Al-Rajhi Bank (a) Table of comparison between the banks : Bank Simpanan Nasional (BSN) AmIslamic Bank Bank Muamalat Al-Rajhi Bank Total loan RM50,000 RM50,000 RM50,000 RM50,000 Years of loan 6 YEARS 6 YEARS 6 YEARS 6 YEARS Interest rate 4.99% 4.45% 4.64% 4.27% Monthly payment RM903.00 RM895.00 RM888.00 RM892.00 (b)(i) An interest rate is 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. (b)(ii) Monthly installment is 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 Encik Ahmad plans to take a personal loan of RM 100000 for a duration of 156 months. As a friend of Encik Ahmad and by comparing the installment rates and the monthly instalment from the three brochures, which bank would you suggest Encik Ahmad get his personal loan? Give your reason why. As a friend of Encik Ahmad, I would suggest him to get his personal loan from AmIslamic Bank. I have constructed a table to show comparison between the banks if Encik Ahmad plans to take a personal loan of RM 100,000 for a duration of 156 months (13 years) Bank Simpanan Nasional (BSN) AmIslamic Bank Bank Muamalat Al-Rajhi Bank Total loan RM100,000 RM100,000 RM100,000 RM100,000 Years of loan 13 YEARS 13 YEARS 13 YEARS 13 YEARS Interest rate 4.99% 4.45% 5.00% 4.95% Monthly payment R1057.00 RM1025.00 RM1057.70 RM1054.00 Based on the table I have constructed, the lowest interest rate is from AmIslamic Bank which is only 4.45%. Encik Ahmad does not have to pay more on interest as the money can be used for other expenses. For monthly payment, Encik Ahmad only have to pay RM 1025 per month. Compared to Bank Simpanan Nasional, Bank Muamalat and Al-Rajhi Bank, AmIslamic Banks monthly payment is the lowest. So there is no doubt why I suggest Encik Ahmad to get his personal loan from AmIslamic Bank as the bank offers the best rate to their customers. PART 3 Find the number of months that Encik Ahmad would take to have paid atleast RM 40,000. 156 months RM100,000 = 1.56 x 10^(-3) = 1.56 x 10(-3) x RM 40,000 = 62.4 = 63 months. FURTHER INFORMATION Calculate how much would Encik Ahmad save if he makes the loan repayment in 10 years. 10 years RM1222.00 x 120 months = RM 146,640.00

13 years RM 1025.00 x 156 months = RM159,900.00 = RM 159,900.00- RM 146,640.00 = RM 13,260.00 CONCLUSION After I accomplished this project, I have found that the mathematics is fun and very useful in daily life. I have learnt the important of perseverance as time will be inverted to ensure the completion and excellence of this project. On the other hands , I have learnt the virtue to making together as I have helped and received help from my fellow peers in the production of this project. I realised the important to be thankful and appreciative during completing this task. This is because I able to apply my mathematical knowledge in daily life and appreciate the beauty of mathematic. This project is a several training stage for me to prepare myself for the demands of my future undertaking in the university and work life. REFLECTION

While I conducting this project, there is a lot of information that I have found. I have learnt how loan is calculated. Apart from that, this project encourages the student to work together and share their knowledge. It is also encourages student to gather information from the internet, improve thinking skills and promote effective mathematical communication. Not only that, I had learned some moral values that I can practice in a daily. This project had taught me to be 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 only 3 weeks to complete this project and pass up to my teacher just in time. I also enjoy doing this project as I need to spend my time with friends to complete this project and it had tightens 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 .