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How Well Do You Know Your Finances?
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How Well Do You Know Your Finances?

by programmerDecember 18, 2015

Congratulations! You’ve made it this far on your own earning power, loans, and familial aid, and you’ve yet to sink the financial boat. That must mean you’re doing something right, right? But how right are you, and is there anything you can do better? Ask yourself these questions and see!

Compound Interest

Both you and your friend aim to open a savings account with an interest of 3.15% per month. You opened one at 21 years old, deposited RM20,000 in it, and let it be for 10 years. Your friend opens one at 25 years old, deposits RM5,000 in it, and continues to bank in RM350 every month. Who has more money when you reach 30 years old, assuming both of you are the same age?

Mortgage Interest

You have chosen to take out a mortgage loan valued at RM300,000, and you have the choice between a 20-year and a 30-year tenure. A 20-year tenure will mean higher monthly installments but lower total interest paid. Is this true or false?


Suppose the prices of the goods you buy will double in ten years. If your income also doubles in ten years, how much will you be able to buy?


You have heard a lot of positive feedback about the performance of a certain company and you have the data to back it up. You are now considering purchasing that company’s stock, but doing so will require you to let go of your mutual fund stocks. Which one offers a safer return on investment (ROI)?

Loan Repayments

You have a RM30,000 auto loan for your new car, which comes with a 9-year tenure and a reducing balance interest rate. You pay the same amount each month, but the ratio that goes towards your loan repayment increases with time. Is this true or false?

Credit Cards

You have purchased items using your credit card on the 21st of the month. You believe that you’ll be charged an interest on the remaining unpaid balance if you don’t pay off your credit card debt by the 30th of the month, the end of your billing cycle. Is this true or false?

Credit Cards

You earn RM5,000 a month, take on an auto loan, and own a credit card with a RM3,000 limit. You use RM2,500 every month and repay it in full, so you think that your credit report is healthy. Is this true or false?


The answers are: Your friend, true, the same amount you can buy today, mutual fund stocks (because it comprises stocks from multiple companies instead of just one), true (reducing balance interest means that the interest will be charged on the remaining debt balance, not the amount loaned), false (most credit cards in Malaysia have a 20-day interest-free grace period for retail purchases), and false (nearly maximising or over-shooting your monthly income is a danger to your credit report). How many questions did you get right?

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