Answer to Question #277224 in Financial Math for Nyela

Question

Pn. Rohani earns RM3000 a month working in Berjaya Sdn. Bhd. and she uses 40% of her monthly salary for utilities and other expenses. To improve the quality of education, she decided to pursue higher education, and she intends to apply for a personal loan from a local bank to cover the cost of her studies which is estimated to be RM102,000 for 4 years. You are a financial advisor who does not favor any financial institution and Pn. Rohani asked for your advice to decide to choose the bank that fits her income and living expenses. She brought two pamphlets containing the loan schedule and payment period from different banks. Based on given information, provide reasonable arguments and evidence to evaluate the two loan offers provided by Pn. Rohani. Next, suggest to her which bank to choose from. Create a loan amortization schedule using EXCEL to show the relevant information to Pn. Rohani (Refer EXCEL Tutorial).

Answer 1

the amount that can be given for a loan per month

$3000-3000\times0.4=1800$

at a rate of 5%

at a rate of 1%:

The payment exceeds the balance of the salary balance after payment of current expenses, therefore, the loan will not be given and it is necessary to reduce current expenses.