BIL DETAILS PAGE

1 ACKNOWLEDGEMENT I
2 WORK FRAME 1
3 WORK DISTRIBUTTION 2
4 INTRODUCTION TO BASIC MATHEMATICS 3
5 INTRODUCTION TO PERSONAL FINANCING 3
6 OBJECTIVE OF THE STUDY 4
7 SOLUTION:
 FINANCIAL PROBLEM 5
 FINANCIAL DEDUCTION 6
 FINANCIAL INSTITUTE PAYMENT 7-9
CALCULATION 10
 COMPARISING THE FINANCIAL INSTITUTE 10
LOAN OFFER
 CHOOSING THE BEST LOAN OFFER 11
SUITABLE WITH FINANCIAL NEED AND
PAYMENT
8 OTHERS
 REFLECTION 12
 BIBLIOGRAPHY AND REFERENCES
ASSALAMUALAIKUM W.B.T.

We were very grateful to able finishing this short assignment given to us. During
the two week period of finishing it we had do many research in the library and
internet with guidance from lecturer. We also grateful that this assignment had
been able to be finish within the dateline given to us. We were very thankful that
our lecturer had help us so much in publishing this assignment with her
information with the topic of the assignment and thus help to improve the content
of the assignment. We also thankful with the help given from our friends during
the process involving the process of publishing the assignment such as their
willingness to share their knowledge and source of information. As a group we
also grateful that all member of the group are very supportive to each other and
very committed to involve in the process of making the assignment.

i
WORK FRAME
DATE WORK FRAME

3 August 2008 Explanation of the short course work in lecture by Pn

Mahany Awang

4 August 2008 Group distribution and leader election

5 August 2008 Start the assignment

Find the information needed

7 August 2008 Group discussion:

-examine and study the banks that use in the
assignment
8 August 2008 Start to write the assignment in microsoft word

13- 14 August 2008 Make references with lecturer form Mathematics

Department
18 August 2008 Finish the assignment

19 August 2008 Final check the assignment

21 August 2008 Send the assignment to the lecturer

2
Introduction of basic mathematic

Basic mathematic is the study of mathematic application in the real life. The
study includes the use of mathematics in financial, distance, measurement, and
many more.

Basic mathematic is essential in the real life because many of event in our life
that involve the use of mathematic for example purchasing good or groceries in
the store. These situations need us able to calculate money and the basic
principle of mathematic.

Basic mathematic is very important not only for adult but also for children as a
preparation for them to the world. That is the important reason we as teacher
trainee to learn the concept of basic mathematic so that we can teach this to our
next generation.
Introduction to personal financial loan

Personal loan is a way for someone to get a large sum of money in instant. Its
require some one to pay back the sum that we loan in a fixed period of times with
an interest that varies with the sum of loan we made.

Today, many financial institute offer the service of personal financing. These
include the registered and the unauthorized financial institute. There are many
aspect need to consider before someone making a decision to take a personal
financing even from the registered financial institute.

The aspect need to take serious consideration is the ability to pay back the loan
because if we unable to pay back the loan we make some serious action can be
taken to us by the financial institute such as declaration of bankrupt

3
Objective of the study

The objective of publishing this folio is to complete one of the syllabuses in basic
mathematics which need us to conduct a short research about the procedure of
making personal loan within a controlled situation.

The study is also to expose us to the real procedure when making contact with
formal situation involving professional personal in a department for example the
financial institute staff. The situation needs us to be formal and behave
accordingly to show our understanding and formality.

Another objective for the study is to make better understanding for us as teacher
trainee the concept of mathematics use in the financial or banking world. This will
then improve for us the importance of mathematics in daily life.
Introduction for loan situation

An individual is facing a financial problem for buying a house for future use
during marriage. According to the plan the real value of the house is RM 90,000.
This individual is planning to buy the house with the help of his future wife. The
amount is split among them with the individual paying for RM 50,000 and his
future wife paying for another RM 40,000. So this individual need to loan
RM 50,000 from a bank with the lowest rate of interest of the instalment payment.

This individual has six different banks for him to consider make loan with.
He has a problem to choose the best bank for him to make loan. He need to
choose the bank carefully to avoid him from face a loss.

To solve this problem the individual need to study and examine the best
year of instalment according to the capability of his cash without influencing his
average monthly spending.

For the time being he rent a house with six of his friend to save his money
for future use. His monthly income is RM 2,500.00 and he has other different
financial reasonability.

4
Financial loan problem

There are many reasons for someone to make financial loan. The average
situation involving the persons making loan is due to their need for something is
beyond their own financial capability. For example to buy something really
expansive but also very important such as a house or a vehicle. All these need a
large sum of money which average people cannot afford by they own. These why
financial loaning is come in handy.

The situation given to us is an average situation of the people making loan in the
country. We will study the loaning process for a person with income of
RM 2,500.00 monthly. With the sum of financial loan want to make is
RM 50,000.00.

From the study we made, before a person make a loan with a financial institute
their will make a list or at least survey a potential financial institute they wish to
make financial loan with. Usually they will make a survey for at least five to seven
potential financial institutes.
Financial institute will then try to attract the potential person want to make loan
with their financial institute by giving them their best offer from the term of interest
rate, instalment payment, procedure involve, financing rate and the period of
instalment.

5
Financial problem

• FINANCIAL DEDUCTION

• INCOME : RM 2500.00

• Deduction made: - house rent : RM 60.00

- utilities spending : RM 200.00
- financial savings : RM 350.00
- vehicle loan : RM 300.00
- house expenditure : RM 300.00

• Deduction made in a month : RM 1210.00

• Plus average personal spending in a

month : RM 150.00
 • Total average deduction in a month : RM 1360.00

• The balance from the income after deduction in every month:

Income : RM 2500.00
Total deduction in a month: RM 1360.00
Balance : RM 1140.00

6
FINANCIAL INSTITUTE PAYMENT CALCULATION

After making great consideration on the state of personal financial capability with
the term offered by the financial institute and the payment period, we agreed to
make a loan that the monthly payment is below RM 1000.00 a month. We also
agreed to make the payment period under 7-10 year at most. This is to avoid
great loss during the payment back to the financial institute.

• BANK ISLAM MALAYSIA BERHAD

• MONTHLY PAYMENT : RM 841.07

• PERIOD OF PAYMENT : 7 YEARS
• INTEREST RATE : 5.90%

• The total sum pay in 7 year : = RM 841.07 x (7x12)

= RM 70,649.88
 • Differences in loans and : RM 70,649.88
Payment made in 7 years - RM 50,000.00
RM 20,649.88

• Extra payment make every : = RM 20,649.88 ÷ (7x12)

month = RM 245.83

• BANK SIMPANAN NASIONAL

• MONTHLY PAYMENT : RM 835.00

• PERIOD OF PAYMENT : 7 YEARS
• INTEREST RATE : 5.75%

• The total sum pay in 7 year : = RM 835.00 x (7x12)

= RM 70,140.00

• Differences in loans and : RM 70,140.00

Payment made in 7 years - RM 50,000.00
RM 20,140.00

• Extra payment make every : = RM 20,140.00 ÷ (7x12)

month = RM 239.76

7
• BANK RAKYAT

• MONTHLY PAYMENT : RM 831.00

• PERIOD OF PAYMENT : 7 YEARS
• INTEREST RATE : 4.90%

• The total sum pay in 7 year : = RM 831.00 x (7x12)

= RM 69,804.00

• Differences in loans and : RM 69,804.00

Payment made in 7 years - RM 50,000.00
RM 19,804.00

• Extra payment make every : = RM 19,804.00 ÷ (7x12)

month = RM 235.76
• OCBC BANK

• MONTHLY PAYMENT : RM 992.00

• PERIOD OF PAYMENT : 7 YEARS
• INTEREST RATE :%

• The total sum pay in 7 year : = RM 992.00 x (7x12)

= RM 83,328.00

• Differences in loans and : RM 83,328.00

Payment made in 7 years - RM 50,000.00
RM 33,328.00

• Extra payment make every : = RM 33,328.00 ÷ (7x12)

month = RM 396.76

8
• CIMB BANK

• MONTHLY PAYMENT : RM 906.00

• PERIOD OF PAYMENT : 7 YEARS
• INTEREST RATE : 12.60 %

• The total sum pay in 7 year : = RM 906.00 x (7x12)

= RM 76,104.00

• Differences in loans and : RM 76,104.00

Payment made in 7 years - RM 50,000.00
RM 26,104.00

• Extra payment make every : = RM 26,104.00 ÷ (7x12)

month = RM 310.76
 • RHB BANK

• MONTHLY PAYMENT : RM 1,071.91

• PERIOD OF PAYMENT : 7 YEARS
• INTEREST RATE : 9.91%

• The total sum pay in 7 year : = RM 1,071.91 x (7x12)

= RM 90,040.44

• Differences in loans and : RM 90,040.44

Payment made in 7 years - RM 50,000.00
RM 39,040.44

• Extra payment make every : = RM 39,040.44x(7x12)

month = RM 464.77

9
Comparing the offer from the financial institute

The main criteria in choosing the financial institute that we want to make loan is:-

- Low interest rate

To ensure minimum extra payment during the period of instalment

- The procedure involve

Making sure the procedure involve is simple and convenient we are qualified to
make financial loan. Also to make sure the approval to make the loan is short
or convenient enough.

- Affordable instalment
Make sure the instalment we made are affordable to our personal cash state
to avoid over budget or disturbing our own regular cash cycle

- Fixed financing rate

 To avoid from financing rate fluctuations during payment instalment period.

Choosing the best two offer

The best two offers that we give great consideration is the Bank Rakyat and
Bank Simpanan Nasional.

• BANK SIMPANAN NASIONAL

• MONTHLY PAYMENT : RM 835.00

• PERIOD OF PAYMENT : 7 YEARS
• INTEREST RATE : 5.75%

• The total sum pay in 7 year : = RM 835.00 x (7x12)

= RM 70,140.00

• Differences in loans and : RM 70,140.00

Payment made in 7 years - RM 50,000.00
RM 20,140.00

•Extra payment make every : = RM 20,140.00 ÷ (7x12)

month = RM 239.76
10
• BANK RAKYAT

• MONTHLY PAYMENT : RM 831.00

• PERIOD OF PAYMENT : 7 YEARS
• INTEREST RATE : 4.90%

• The total sum pay in 7 year : = RM 831.00 x (7x12)

= RM 69,804.00

• Differences in loans and : RM 69,804.00

Payment made in 7 years - RM 50,000.00
RM 19,804.00

• Extra payment make every : = RM 19,804.00 ÷ (7x12)

 month = RM 235.76

CHOOSING THE BEST OFFER

In the end we decide to take the loan offer from Rank Rakyat due to the financial
institute interesting offer. The criteria that make us choose Bank Rakyat is:-

- it offer relatively lower interest rate than other bank

- it also use an Islamic banking procedure which make us more confident to
make loan with.
- the monthly instalment payment that we need to made is also affordable
and not influencing our usual monthly budget.
- the offer also provide us with fixed monthly instalment so there will never be
any change to the monthly payment during the instalment period.

- the instalment period for the loan : 7 YEARS.

- the sum of total payment including interest is : RM 69,804.00
- the sum of interest payment : RM 19,804.00
- interest rate : 4.90%