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 Personal financial management, V2

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fahmisarkawi
post Apr 25 2012, 06:09 AM

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Need your opinion on my current dilemma:

Took a personal loan years ago and now the balance is RM 17,+++ with 4 more years to go. Have funds saved around RM 20,+++. Should I use the funds and make an early settlement of the loan which would entitle me around RM 1,300 discount or should I just leave the fund in ASB and continue servicing the loan until finished?
fahmisarkawi
post Apr 25 2012, 07:53 PM

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QUOTE(memberiii @ Apr 25 2012, 07:38 AM)
Effectively you have the choice of investing $15,700 today.
You have the choice to save this amount in company A for an annual return of 2.1% for 4 years and at the end of this period, the company will return to you $17,000.85.
On the other hand, you can save this in ASB where the return is very much higher, perhaps, 3 to 4 times that of company A.
Therefore, leave your fund in ASB and continue to service the loan over the next 4 years. 
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Here are the mathematics:
If today you were to invest $15,700.00 at a rate of 2.01%, you would have $17,000.85 at the end of 4 time periods (e.g. weeks, months, or years). In other words, a future value of $17,000.85 is equal to a present value of only $15,700.00.

What does this mean to you? Well, if you had a choice between taking an amount higher than the $15,700.00 today and taking the $17,000.85 at the end of 4 time periods, you should take the money today. By doing so, you would be able to invest the higher amount at 2.01% for 4 equal time periods, which would end up giving you more than $17,000.85.

Read more: http://www.investopedia.com/calculator/FVC...x#ixzz1t0HHaVJu
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memberiii,

Thanks for the input.......Yeah im guessing I should use the money for investments such as ASB or others. Appreciate it mate! rclxms.gif

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