Add Math Project Work 3/2010

download Add Math Project Work 3/2010

of 29

Transcript of Add Math Project Work 3/2010

  • 8/9/2019 Add Math Project Work 3/2010

    1/29

    Jacky chen

    SMJK TIONG HUA

    ADDITONAL

    MATHEMATICS

    PROJECT WORK

    3/2010

  • 8/9/2019 Add Math Project Work 3/2010

    2/29

    2

    Contents

    Introduction

    Task Specification

    Conjectures

    Problem Solving : Part 1

    Problem Solving : Part 2

    Verification

    Further Exploration

    Conclusion

    Reflection

  • 8/9/2019 Add Math Project Work 3/2010

    3/29

    2

    INTRODUCTION

    Warisan RMN is a company that conduct business of selling computer

    components. It was esblished in Januari 2008. This company offer for the

    community a new brand of computer components that are good in quality

    and durable.

    Warisan RMN has own mission which is to be the leading among the

    company that also sells the computer components in year 2015. This mission

    set up the company to work harder in order to achieve it mission.

    Besides, this company had set up some objectives as progress markers

    along the way to goal achievement. First is to have a successful company that is

    a leader in customer service and that has a loyal customer following. Second is

    to get maximum profit from selling the computer components. Third is to have a

    healthy competition among the manufacturer company.

    Next one is about the Business Philosophy. This company has set the

    Customer is always right as the philosophy and whatever the customer

    comments or unsatisfied about our services, we take that as the positive

    feedback and try to turn over a new leaf.

    Then, Warisan RMN has set the targets to sell it products to every layer of

    community because everyone using the computer in daily life to make works

    and so on. If capable, this company also wants to market the products to world

    market and be the best among the manufacturer company and not just in

    Malaysia only.

    Futhermore, this products always got positive feedback from the customer

    and the growth for this products always increase by time in line with

    technology improvements. So, this golden opportunity should be wisely use

    by our company in order to gain the maximum profit.

  • 8/9/2019 Add Math Project Work 3/2010

    4/29

    2

    TASK SPECIFICATION

    This task is actually focus on several elements as the key to solve all

    the problems asked. First, on task 1 it asked to find the relationship between

    demand, d, and the selling price, s, of the computer component by plotting

    the graph. Then, interpret the graph, make discussion and write on a briefexplanation on the relationship between the demand and the selling price of

    the computer components manufactured by Warisan RMN. Second one in

    task 1 is about express the yearly profit, P, in terms of the selling price, s and

    make some comment about it. Next, to find out the maximum profit and the

    corresponding selling price of computer components by using two or more

    methods like using completing the square and differentiation. Lastly in task 1

    is about to find out the number of the computer components to be

    manufactured by the Warisan RMN in order to gain maximum profit from

    selling it product.

    After finished in task 1, switch to task 2. Focus in task 2 is about loan.

    In year 2009, Warisan RMN made a profit of RM200 000 and intends to

    increase its production in year 2010. So, as the manager of Warisan RMN,

    need to decide on the amount of loan and the period of the loan to be taken

    for that purpose. Then, the first focus in task 2 is about the calculation on

    the total amount of interest incurred for each of repayment period and their

    corresponding amount of loan. Next focus in task 2 is about calculation of the

    average interest rate per month from the loan. Tabulate the results and

    make some comment about it. Then, make tabulation on the amount ofyearly repayment for the loan taken of repayment period up to 5 years from

    RM10 000 to RM100 000. Futhermore, this focus also required to show that

    the annual payment for loan amount of RM10 000,RM15 000,RM20 000 and

    so on in form of progression by observing the total amount payment for 12

    months. Fourth focus is about to find out the maximum amount of loan, in

    multiples of RM5000 for the each choice of repayment period: 1 year, 2

    years, 3 years, 4 years and 5 years. After that, need to find out the loan

    option should the Warisan RMN take and make some elaboration for that

    reason. Lastly focus in task 2 is find out about the amount of the reserve

    fund at the each month until 31st December 2010 by assuming that the bankgives an annual interest of 2.5% for the Warisan RMN reserve fund of RM50

    000 in a bank.

  • 8/9/2019 Add Math Project Work 3/2010

    5/29

    2

    CONJECTURE

    Warisan RMN has own goal which is to gain highest profit by selling it

    products to community. We aim to reach the target by reduce the cost of

    production the computer components but maintain it quality. This is hard to

    do because so many risk needed to handle it up. All this up depends ondemand, if the demands higher our company can get the maximum profit

    but if dont our company will sick.

    Then, our company need to have a strategic plan in order to get the

    maximum profit by selling our product. There are many challenge outside

    because there are too many company had manufactured the computer

    components, not just our company but only different on it brands. The

    customer must select the product that have good quality and the cheapest

    one. We will try our best in our product in order to give satisfied to the

    customer. Remember this slogan..Customer is always right and we as theseller need to give them the best services. If our products is good and best,

    customer must came again next time and maybe with their friends. In this

    way, our company can reach for our goal soon.

    Besides, the demand for this products always increasing as fast as the

    technology today. In this modern life, everyone will use computer to make

    work because it is easy and comfortable to use. So, if our company take this

    goden opportunity and fulfill the demand of customer, just imagine how

    much that our company can gain from it selling. Just be at the right time and

    place and then sell the product.

  • 8/9/2019 Add Math Project Work 3/2010

    6/29

    2

    Strategy

    Part 1

    (a)

    The graph shows estimated yearly demand against selling price for a unit of

    computer components.

  • 8/9/2019 Add Math Project Work 3/2010

    7/29

    2

    From the graph, we can conclude that :

    -The graph shows when the price of the computer component at price RM 75,

    it demands at highest value, 4500 units. Beside that, when the price of

    computer component increase to RM 125, it demands become decrease to

    3500 units. It demands keep show decreasing at 2000 units when the priseof the computer component increase to RM 200. Then, when the price is

    increasing to RM 250, its demands show the lowest value of demand, 1000

    units. So, relationship between the demand and the selling price of the

    computer components is negative. The higher its price, the lower its

    demand. The graph also shows the selling price and demands are inversely

    propotional.

    -Next, the graph also shows only they with high income can get the best

    things even it price is expensive while the people with moderate income can

    get that things also but in low price.

    -Thus, to become fair to everyone, decrease it selling price but maintain it

    good quality so that the demand will increase and Warisan RMN will get the

    highest profit.

  • 8/9/2019 Add Math Project Work 3/2010

    8/29

    2

    (b)

    -If the production cost of the computer component is RM 50 per unit, yearly

    profit, P, can be expressed in terms of the selling price, s, as shown below:

    For 1 unit of the particular type of computer component :-

    Cost of 1 unit = RM 50

    Selling price of 1 unit = s

    Hence, profit gained of 1 unit sold, P = s 50

    (total profit = total sales total cost )

    For d unit of the computers sold :-

    Profit gained = ?

    To simplify this relation :

    1 unit s - 50

    P unit d/1 x s 50

    Hence, P = d(s 50) 1

    But from the graph in the previous, the straight line relating to the variables

    of d and s :

    Take the point (75,4500) (250,1000) and then find the gradient :

    gradient/m = 4500 - 1000

    75 - 250

    = -20

    c/Y-intercept is can take from the graph=6000

    Then, form the linear equation of the graph:

    Y=mx+c

    D=-20s + 60000 2

    Comment :

    P is a quadratic function in terms

  • 8/9/2019 Add Math Project Work 3/2010

    9/29

    2

    Substitute equation 2 into 1 :

    P = ( -20s + 6000 )( s 50 )

    P = -20( s 300 )( s 20 )#

    So, this equation is made to easy for our company to find out the profit

    that our company will get soon.

    (c )

    Besides, there are another methods that can be use to find out the

    maximum profit and the corresponding selling price of the computer

    components. First is by using differentiation and second one by using

    completing square.

    Method 1 ( by differentiation ) :

    P = -20(s 300)( s 50)

    = [-20( s 300) ][s 50 ]

    By using the product rule :

    Dp

    = [-20( s 300)][ 1 ] + [ s -50 ] [ -20 ]

    Ds

    = -20s + 6000 -20s + 1000

    = -40s + 7000

    Let dp

    = 0 , hence -40s + 7000 = 0

    Ds 40s = 7000

    S = 70004 = 175

    D2p

  • 8/9/2019 Add Math Project Work 3/2010

    10/29

    2

    = -40 (

  • 8/9/2019 Add Math Project Work 3/2010

    11/29

    2

    In order to gain the maximum profit from the selling our product,

    Warisan RMN must determine the number of the computer components that

    needed to be manufacted. This decision needed to be carried out carefully

    because can effect the whole of our selling. This is can be done by using

    formulae as shown below:

    From the equation of d = -20s + 6000,

    When s = 175 ( from the part c , max P = 312 5000 when s = 175 ) :

    D = -20 ( 175 ) + 6000

    = - 3500 + 6000

    = 2500 #

    So, 2500 units of computer component needed to manufacture in order to

    get the maximum profit from selling it by Warisan RMN.

    PART 2

  • 8/9/2019 Add Math Project Work 3/2010

    12/29

    2

    a)

    Warisan RMN has made a profit of RM200 000 in year 2009 and

    intends to increase its production in year 2010. Im as the manager of

    Warisan RMN need to take the right decision from which bank I must get the

    loan.The table below shows total amount of loan and it total interest incurredfor 5 years from Bank A.

    Total LoanRM

    Total Interest Incurred(RM)

    12 Months 24 Months 36 Months 48 Months 60 Months

    10 000 2408 4808 7208 9632 12 020

    20 000 4804 9616 14 416 19 216 24 040

    30 000 7200 14 400 21 624 28 800 36 000

    40 000 9608 19 208 28 832 38 432 48 020

    50 000 12 004 24 016 36 004 48 016 60 040

    b)

  • 8/9/2019 Add Math Project Work 3/2010

    13/29

    2

    The table below shows the calculation on the average interest rate per

    month from Bank A.

    Average interest per month = n months

    Total Loan(RM)

    Average Interest Rate Per Month

    12 Months 24 Months 36 Months 48 Months 60 Months

    10 0000.0200666

    70.0200333

    30.0200222

    20.0200666

    70.0200333

    3

    20 0000.0200166

    70.0200333

    30.0200222

    20.0200166

    70.0200333

    3

    30 000 0.02 0.020.0200222

    20.02 0.02

    40 000 0.02001667

    0.02000833

    0.02002222

    0.02001667

    0.02000833

    50 0000.0200066

    70.0200133

    30.0200022

    20.0200066

    70.0200133

    3

    Table shows the average interest rate per month for every amount of loan. Based on this

    table, we can see that each loan of the same period of payment seems to have the almost same

    average interest rate per month.

    The table shows balance interest that imposed to the loan taken from

    Bank A. It shows that the rate of interest matching by another up to 5 years.

    It also shows for every RM 10 000 of loan increase, the interest of loan also

    increase at RM200++.

    c)

    The table below shows the tabulatation of the amount of yearly payment for

    each choice of repayment period up to 5 years for loan amounts from RM 10

    000 to RM 100 000 and the next table shows the annual payment for all

    amount of loans in form of progression.

  • 8/9/2019 Add Math Project Work 3/2010

    14/29

    2

    Total Loan (RM)Monthly Payment (RM)

    12 Months 24 Months 36 Months 48 Months 60 Months

    10 000 12408 7404 5736 4908 4404

    15 000 18600 11100 8604 7356 6600

    20 000 24804 14808 11472 9804 8808

    25 000 31008 18504 14340 12252 11004

    30 000 37200 22200 17208 14700 13200

    35 000 43404 25908 20076 17160 15408

    40 000 49608 29604 22944 19608 17604

    45 000 55800 33300 25800 22056 19800

    50 000 62004 37008 28668 24504 22008

    55 000 68208 40704 31536 26952 24204

    60 000 74400 44400 34404 29400 26412

    65 000 80604 48108 37272 31860 28608

    70 000 86808 51804 40140 34308 30804

    75 000 93000 55500 43008 36756 33000

    80 000 99204 59208 45876 39204 35208

    85 000 105408 62904 48732 41652 37404

    90 000 111600 66600 51600 44100 39600

    95 000 117804 70308 54468 46560 41808

    100 000 124008 74004 57336 49008 44004

  • 8/9/2019 Add Math Project Work 3/2010

    15/29

    2

    Loan

    Amount

    (RM)

    Annual payment (RM)12 months

    10 000 1034 x 12 = 1240815 000 1550 x 12 = 18 60020 000 2067 x 12 = 2480425 000 2584 x 12 = 3100830 000 3100 x 12 = 3720035 000 3617 x 12 = 4340440 000 4134 x 12 = 4960845 000 4650 x 12 = 5580050 000 5167 x 12 = 62004

    Annual Payment (RM) for each loan amount

    Then, from the table we can observe that each consecutive terms give

    common difference of 6204 or 6192 .

    18 600 12 408 = 6 192 43 404 37 200 = 6 204

    24 804 18 600 = 6 204 49 608 43 404 = 6 204

    31 008 24 804 = 6 204 55 800 49 608 = 6 192

    37 200 31 008 = 6 192 62 004 55 800 = 6 204

    It shows the pattern like shown below :

    6192, 6204, 6204, 6192, 6204, 6204, 6192, 6204, 6204, and so on. Thisshows that the annual payment of loan form an arithmetic progression.

    d)1-

  • 8/9/2019 Add Math Project Work 3/2010

    16/29

    2

    Since that the company allocated only 20% of the profit made in the

    year 2009 on loan repayment, means that only RM 40 000 allocated on loan

    repayment.

    100% RM 200 000

    20% of the profit made in the year 2009 20% x RM 200 000 = RM40 000 to repay loan

    Amount

    TotalLoan

    Yearly Repayment

    (RM) 1 year2

    years3

    years4

    years5

    years

    10000 12408 7404 5736 4908 4404

    15000 18600 11100 8604 7356 6600

    20000 24804 14808 11472 9804 8808

    25000 31008 18504 14340 12252 11004

    30000 37200 22200 17208 14700 13200

    35000 43404 25908 20076 17160 15408

    40000 49608 29604 22944 19608 17604

    45000 55800 33300 25800 22056 19800

    50000 62004 37008 28668 24504 2200855000 68208 40704 31536 26952 24204

    60000 74400 44400 34464 29412 26400

    65000 80604 48108 37272 31860 28608

    70000 86808 51804 40140 34308 30804

    75000 93000 55500 43008 36756 33000

    80000 99204 59208 45876 39204 35208

    8500010540

    862904 48732 41664 37404

    9000011160

    0

    66600 51600 44112 39600

    9500011780

    470308 54465 46560 41808

    10000012400

    874004 57336 49008 44004

    Annual payments of loan amount

  • 8/9/2019 Add Math Project Work 3/2010

    17/29

    2

    A

    Tn = a + (n 1)d

    2-

    As we only allocated RM 40 000 for loan repayment, the maximum

    amount of loan that we should take is RM 30 000 for a year of repayment

    period. Then for 2 years repayment period, we should take RM 50 000. For 3

    years repayment period, we should take RM 65 000 meanwhile for 4 years

    repayment, we should take RM 80 000. Lastly for 5 years repayment, we

    should take RM 90 000.

    e)

    As the Warisan RMN has set aside a reserve fund of RM 50 00 in a bank

    and earns monthly interest beginning 1st January 2010 and got 2.5% of

    annual interest.

    So..

    Monthly interest = 12 RM50 000

    =

    n= Monthsa = RM50 000

  • 8/9/2019 Add Math Project Work 3/2010

    18/29

    2

    d=

    T1 = RM50 000

    T2 = RM50 000 +

    = RM50 104.17

    T3 = RM50 000 + (2 )

    = RM50 208.33

    T4 = RM50 000 + (3 )

    = RM50 312.50

    T5 = RM50 000 + (4 )

    = RM50 416.67

    T6 = RM50 000 + (5 )

    = RM50 520.83

    T7 = RM50 000 + (6 )

    = RM50 625

    T8 = RM50 000 + (7 )

    =RM50 729.17

    T9 = RM50 000 + (8 )

    = RM50 833.33

    T10 = RM50 000 + (9 )

    = RM50 937.50

    T11 = RM50 000 + (10 )

    = RM51 041.67

    T12 = RM50 000 + (11 )= RM51 145.83

    T13 = RM50 000 + (12 )

    = RM51 250.00

  • 8/9/2019 Add Math Project Work 3/2010

    19/29

    2

    Thus, the amount of reserve for each month is:

    January = RM50 104.17

    February = RM50 208.33

    March = RM50 312.50 April = RM50 416.67

    May = RM50 520.83

    June = RM50 625.00

    July = RM50 729.17

    August = RM50 833.33

    September = RM50 937.50

    October = RM51 041.67

    November = RM51 145.83

    December = RM51 250.00

    ANALYSIS

    At the end, my conjecture is right because Warisan RMN gain themaximum

  • 8/9/2019 Add Math Project Work 3/2010

    20/29

    2

    FURTHER EXPLORATION

    As the manager, I also had survey to other financial sources available

    in the market that may be utilized by the Warisan RMN for capital investmentlike Islamic loan. Islamic loan is based on Islamic banking that are very differ

    with conventional banking. This is because they are extremely different in

    many ways. The key difference is that Islamic Banking is based on Shariah

    foundation. Thus, all dealing, transaction, business approach, product

    feature, investment focus, responsibility are derived from the Shariah law,

    which lead to the significant difference in many part of the operations with

    as of the conventional.

    The foundation of Islamic bank is based on the Islamic faith and must

    stay within the limits of Islamic Law or the Shariah in all of its actions and

    deeds. The original meaning of the Arabic word Shariah is 'the way to the

    source of life' and is now used to refer to legal system in keeping with the

    code of behaviour called for by the Holly Qur'an (Koran). Amongst the

    governing principles of an Islamic bank are :

    * The absence of interest-based (riba) transactions;

  • 8/9/2019 Add Math Project Work 3/2010

    21/29

    2

    * The avoidance of economic activities involving oppression (zulm);

    * The avoidance of economic activities involving speculation (gharar);

    * The introduction of an Islamic tax, zakat;

    * The discouragement of the production of goods and services which

    contradict the Islamic value (haram).

    On the other hand, conventional banking is essentially based on the

    debtor-creditor relationship between the depositors and the bank on one

    hand, and between the borrowers and the bank on the other. Interest is

    considered to be the price of credit, reflecting the opportunity cost of money.

    Islamic law considers a loan to be given or taken, free of charge, to

    meet any contingency. Thus in Islamic Banking, the creditor should not take

    advantage of the borrower. When money is lent out on the basis of interest,more often that it leads to some kind of injustice. The first Islamic principle

    underlying for such kind of transactions is "deal not unjustly, and ye shall not

    be dealt with unjustly" [2:279] which explain why commercial banking in an

    Islamic framework is not based on the debtor-creditor relationship.

    The other principle pertaining to financial transactions in Islam is that

    there should not be any reward without taking a risk. This principle is

    applicable to both labor and capital. As no payment is allowed for labor,

    unless it is applied to work, there is no reward for capital unless it is exposed

    to business risk.

    Thus, financial intermediation in an Islamic framework has been

    developed on the basis of the above-mentioned principles. Consequently

    financial relationships in Islam have been participatory in nature.

    Lastly,the unique features of the conventional banking and Islamic

    banking are shown in terms of a box diagram as shown below:-

  • 8/9/2019 Add Math Project Work 3/2010

    22/29

    2

    Conventional Banks Islamic Banks

    1. The functions and operating modesof conventional banks are based onfully manmade principles.

    1. The functions and operating modesof Islamic banks are based on theprinciples of Islamic Shariah.

    2. The investor is assured of apredetermined rate of interest.

    2. In contrast, it promotes risk sharingbetween provider of capital (investor)and the user of funds (entrepreneur).

    3. It aims at maximizing profit without

    any restriction.

    3. It also aims at maximizing profit but

    subject to Shariah restrictions.

    4. It does not deal withZakat. 4. In the modern Islamic bankingsystem, it has become one of theservice-oriented functions of theIslamic banks to be aZakatCollectionCentre and they also pay out theirZakat.

    5. Lending money and getting it backwith compounding interest is thefundamental function of theconventional banks.

    5. Participation in partnership businessis the fundamental function of theIslamic banks. So we have tounderstand our customer's businessvery well.

    6. It can charge additional money(penalty and compounded interest) incase of defaulters.

    6. The Islamic banks have no provisionto charge any extra money from thedefaulters. Only small amount ofcompensation and these proceeds isgiven to charity. Rebates are give forearly settlement at the Bank'sdiscretion.

    7. Very often it results in the bank'sown interest becoming prominent. Itmakes no effort to ensure growth withequity.

    7. It gives due importance to thepublic interest. Its ultimate aim is toensure growth with equity.

    8. For interest-based commercialbanks, borrowing from the moneymarket is relatively easier.

    8. For the Islamic banks, it must bebased on a Shariah approvedunderlying transaction.

    9. Since income from the advances isfixed, it gives little importance todeveloping expertise in project

    appraisal and evaluations.

    9. Since it shares profit and loss, theIslamic banks pay greater attention todeveloping project appraisal and

    evaluations.

    10. The conventional banks givegreater emphasis on credit-worthinessof the clients.

    10. The Islamic banks, on the otherhand, give greater emphasis on theviability of the projects.

    11. The status of a conventional bank,in relation to its clients, is that ofcreditor and debtors.

    11. The status of Islamic bank inrelation to its clients is that ofpartners, investors and trader, buyerand seller.

    12. A conventional bank has to

    guarantee all its deposits.

    12. Islamic bank can only guarantee

    deposits for deposit account, which isbased on the principle ofal-wadiah,thus the depositors are guaranteed

  • 8/9/2019 Add Math Project Work 3/2010

    23/29

    2

    Beside that, there some views about advantages and disadvantages of

    the Islamic Loan.

    First one is about its advantages Islamic banking and financing is not

    centered only on credit worthiness and ability to repay the loans and

    interest; instead the worthiness and profitability of a project are the mostimportant criteria of Islamic financing while the ability to repay the loan is

    sub-segmented under profitability.

    One of the unique and salient characteristics of Islamic banks is

    that the integration of ethical and moral values with its banking operation.

    The ethical and moral consideration of Islamic banks cannot be detached and

    their behavior should be consistent with the moral and ethical standards laid

    down by the Islamic Shari'ah.

    Unlike the conventional banks, the financing of Islamic banks are

    restricted to useful goods and services and refrain from financing alcoholic

    beverages and tobacco or morally unacceptable services such as casinos

    and pornography, irrespective of whether or not such goods and services are

    legal or not in a given country.

    In contrast with conventional banks, Islamic banks do not consider

    only the credit worthiness and interest rate as standards; instead they must

    apply Islamic moral/ethical criteria in their provision of financing. This adds

    another merit for Islamic banks since there is a benefiticial impact on theproductivity in the economy as it reduces the social and economic cost of

    such harmful products and activities.

    Another important characteristic which forms the basis for the

    development of Islamic banks is the relationship with depositors. They deal

    with their customers on investment grounds rather than a pre-determined

    fixed interest rate. They invest the money of their depositors on high

    profitable projects after going through a strategic analysis in order to give a

    substantial return to their depositors.

    Thus in Islamic banking industry, each bank will attempt to out-

    perform other banks if it wants to attract funds from investors. And the

    ultimate result is that a high return on investments for the investors, which is

    unlikely in a conventional bank where it deals with their depositors on a pre-

  • 8/9/2019 Add Math Project Work 3/2010

    24/29

    2

    determined fixed interest rate.

    Furthermore Islamic banks eliminate the barrier between those who

    save and those who invest, and bring them closer to the real market. The

    nature of the financial intermediation of Islamic banks significantly defersfrom conventional banks and it is in harmony with real market and

    developmental changes in it.

    It is important to highlight some of the challenges faced by the Sri

    Lankan Islamic banks. Although there are many, the most important

    challenges are the lack of Islamic banking professionals and the lack of

    Shari'ah scholars who have specialized in Islamic economics. Further the

    Shari'ah board should have a fair influence on the bank's operational and

    strategic planning. For this process to be successful, the Shari'ah boards of

    our Islamic banks should absorb Islamic scholars based on their technical

    expertise rather than their popularity.

    Second one is about it disadvantages. Almost every bank today in

    Malaysia have Islamic financial/banking section. Is the popularity due to the

    demand of customers or there is some hidden agenda behind it? That's what

    we are going to look at in this article. Many would be surprise once the truth

    is revealed.

    Today we could see many are talking about Malaysia being the No.1

    Islamic financial hub in the world. It is something we all should be proud of.

    Yet, many still do not know how it actually works. Many assumes since its

    Islamic, it means the rates should favor the people and not the bank. Many

    thinks it's a pure form of investment. Yet, there are something in it which

    everyone should be watching out for which could diarrhoea your money.

    Here is why?

    Conventional loan uses principal or balance reducing method to

    calculate your interest. This means that the interest is charged based upon

    your principal balance every year. The principal will reduce whenever youmake a payment. Every time you make a monthly payment, you are actually

    paying interest and reducing the principal with whatever left after paying

    interest. So, making extra payment to your loan at any times would

    definitely reduce the total interest charged as your principal is reduced.

  • 8/9/2019 Add Math Project Work 3/2010

    25/29

    2

    Islamic loan is calculated exactly like your car hire purchase loan. The

    interest (even thou that's not what they are calling it;they call it profit rate)

    is charged on the borrowed principal amount times the number of years up

    front. What does this mean? It means you are paying a lot more interest on

    your loan. Not just that, paying any additional payment amount will not

    reduce your total interest as it's already charged up-front, even thou they

    have some rebate when you have finish paying your loan earlier. But, the

    rebate is useless as the bank have already charged most of the interest at

    the beginning.

    Here are some illustrations to compare conventional loan and Islamic loan.

  • 8/9/2019 Add Math Project Work 3/2010

    26/29

    2

    Check out this table to make comparison between conventional loan and

    Islamic loan.

    No

    wonder

    all banks, including those foreign origin such as HSBC and Standard

    Charterted are rushing to open Islamic financial service. The amount of profit

    they could earn is unbelievable. They could earn double compared toconventional loan. This is really unfair to the people. By right they should be

    charging less than 5% for Islamic loan to make it equivalent to conventional

    loan. Let's see what is the true effective interest rate for the Islamic loan.

    Hope nobody will get heart attack after looking at the figure.

    A 5% interest (profit rate) for a 10yrs Islamic loan is equivalent to.... Roll the

    drum...

    There's nothing wrong with your eye. It is 29.97%. It just like a hire

    purchase loan, the shorter your loan tenure the lower the effective interest

    rate, and the longer the tenure the higher the effective interest rate. So, just

    imagine those who have taken Islamic housing loan 30 years. They would be

    paying through their nose.

    http://4.bp.blogspot.com/_lIRuNRoNWcY/SQfRUnkUZVI/AAAAAAAAABM/WsNBR_D6o7U/s1600-h/EIRIslamic.JPG
  • 8/9/2019 Add Math Project Work 3/2010

    27/29

    2

    Who's fault is it? Is it the religion itself at fault? No.It have nothing

    wrong with the religion. It's the greedy corporate trying to suck all the

    money out of you by showing innocent faces at you. There is nothing wrong

    with the concept. They just need to charge a lower profit.

    CONCLUSION

    After doing research,answering questions,drawing graphs and some

    problem solving, I realise that the usage of additional mathematic is

    important in daily life. It is not just widely used in teaching but also at all

    every aspect in life whether we realise or not. About this project, overall

    it quite interesting because I need to plan it carefully because it about

    future. It starts from making the relationship between the demand and

    the selling price of the computer component followed by express the

    yearly profit in terms of selling price. Then find the maximum profit fromthe selling computer components and determine the number of the

    products to be manufactured by the company in order to gain maximum

    profit.

    Apart from that, in part 2 is all about loan. The rate of interest,

    repayment of the loan and which loan to be taken for the company. It so

    good because followed step by step. Then about further exploration is

    good session because can open my mind about banking in Malaysia. I

    also got some new information that I never know before after doing

    some research about other commercial loans or others financial sources.

  • 8/9/2019 Add Math Project Work 3/2010

    28/29

    2

    REFLECTION

    After spending countless hours,day and night to finish this Additional

    Mathematics Project,here is what I got to say:

    Doing this project makes me realize how important Additional

    Mathematics is in our daily life and completing this project makes me realize

    how fun it is and likable is Additional Mathematics. Besides, I had learned

    many moral values that I practice. This project had taught me to think

    rationally on doing something because can effect the future . Remember..let

  • 8/9/2019 Add Math Project Work 3/2010

    29/29

    the mind first before your act. I also learned to be calm and a lot of patient

    for solving the problem asked.

    Besides, this project prepared me for be more confident on answering

    question even thou I got the weird and so on answer but it give me confident

    to answer it, I become more brave. I also be exposure to do assignmentwhen I entering the university soon.

    Lastly, not much that I can say about this project but I can expressed it

    like the picture below