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The banking system, comprising commercial banks, investment banks, and Islamic banks, is the primary mobiliser of funds and the main source of financing to support economic activities in Malaysia. A commercial bank is a type of financial intermediary and a type of bank. Commercial banking is also known as business banking. It is a bank that provides checking accounts, savings accounts, and money market accounts and that accepts time deposits. Commercial banking may also be seen as distinct from retail banking, which involves the provision of financial services direct to consumers. Many banks offer both commercial and retail banking services. Islamic bank refers to a system of banking or banking activity that is consistent with the principles of Islamic law (Sharia) and its practical application through the development of Islamic economics. Sharia prohibits the payment of fees for the renting of money (usury) for specific terms, as well as investing in businesses that provide goods or services considered contrary to its principles (forbidden). While these principles were used as the basis for a flourishing economy in earlier times, it is only in the late 20th century that a number of Islamic banks were formed to apply these principles to private or semi-private commercial institutions within the Muslim community.

To know about how the financial institutions in Malaysia managing their services. To explore the application on ratios in regular savings, simple and compound interest especially in personal loan. Construct visual representation of data and communicate findings through logical and critical analysis of information

Make meaningful and rational inferences and judgments based on knowledge of ratio

Planning budget proposal for monthly and annual expense based on monthly income. To enable student to write a complete report. Manage data in a systematic manner so as to process and display information discreetly and meaningfully

MONTHLY INCOME
INCOME Allowance Parents Total TOTAL (RM) 430.00 300.00 730.00

The table above shows the monthly income. The allowance is RM 430.00, the parents pocket money is RM 300.00. Hence the total monthly income is RM 730.00.

MONTHLY EXPENSES
ITEMS MONTHLY EXPENSES (RM) 30 250 200 30 50 140 570.00 ANNUAL EXPENSES (RM) 360 3000 5400 360 600 6, 840.00

Car Gas Car Loan Foods Insurance Personal Spending Saving TOTAL EXPENSES ;

300 250 200 150 100 50 0

MONTHLY EXPENSES (RM)

ThePercentag eOf The Monthly Car Gas Expenses(% )

Car Loan 7.9% 7% 8.1% 29% 4% 36% Foods Insurance Personal Spending

The table and charts show the money spent for different types of item such as car gas, car loan, foods insurance, personal spending and saving. The trend indicates that the large money spent for car loan which is about 36%.

PERSONAL LOAN BUDGET

MONTHLY PERSONAL LOAN BUDGET (RM) Total Monthly Income Total Monthly Expenses= Monthly Personal Loan Budget RM 730 RM 570 = RM 160 TOTAL MONTHLY PERSONAL LOAN BUDGET = RM 160 ANNUAL PERSONAL LOAN BUDGET (RM) Total Annual Income Total Annual Expenses = Annual Personal Loan Budget RM 8760 RM 6840 = RM 1920 TOTAL ANNUAL PERSONAL LOAN BUDGET = RM 1920

FORMULA ON HOW TO CALCULATE PERSONAL LOAN REPAYMENT

INCOME PER MONTH RM730.00

RATE OF INTEREST PAYMENT PERIOD AMOUNT OF LOAN AMOUNT OF INTEREST

(Based on the bank interest) 5 YEARS(Depends on the bank schemes) RM 8, 000

total amount of interest AMOUNT HAVE TO PAY Amount of loan + Amount of interest = Amount Have To Pay MONTHLY PAYMENT

=monthly payment

BANK RAKYAT
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INCOME PER MONTH

RM 730.00

RATE OF INTEREST PAYMENT PERIOD AMOUNT OF LOAN AMOUNT OF INTEREST

3.00% 5 YEARS RM 8, 000 8000 X (3.00/100) X5 = RM1200

AMOUNT HAVE TO PAY

RM8000+ RM1200= RM9200

MONTHLY PAYMENT

9200/(5X12)= RM153

We must pay RM153 per month with Bank Rakyat

CIMB BANK

INCOME PER MONTH

RM730.00

RATE OF INTEREST RATE OF

BANK INTEREST (%)

REPAYMENT PERIOD (RM)

4.99% OF AMOUNT
INTEREST

AMOUNT THAT HAVE TO BE REPAY (RM)

MONTHLY REPAYMENT (RM)

PAYMENT PERIOD

5 YEARS
(RM)

AMOUNT OF LOAN
BANK 3.00% 5 years RAKYATOF INTEREST AMOUNT

RM8000
RM 1200 RM 9200 RM 153.00

8000
CIMB BANK 4.99 % 5 years RM 1996

5= RM 1996
RM 9996 RM 166.60

AMOUNT HAVE TO PAY

= RM8000 + RM1996=RM9996

MONTHLY PAYMENT

9996/(5X12)=RM 166.60

We must pay RM160.60 per month with CIMB bank

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TheB ar ChartsOf TheRate Of Interest (% )

6 5 4 3 2 1 0 BANK RAKYAT CIMB BANK The Rate of Interest (%)

The graph shows that CIMB Bank has the highest rate of interest while Bank Rakyat has the lowest rate of interest

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2500 2000 1500 1000 500 0

TheB ar ChartsOf TheT otal Am ount Of Interest (RM)

Total Amount Of Interest (RM) BANK RAKYAT CIMB BANK

The graph shows that CIMB Bank has the highest total amount of interest while Bank Rakyat has the lowest total amount of interest

The B ar ChartsOf The T otal Am ountThat H aveT o Repay(RM)

10200 10000 9800 9600 9400 9200 9000 8800 BANK RAKYAT CIMB BANK Total Amount That Have To Repay (RM)

The graph shows that CIMB Bank has the highest total amount that have to repay while Bank Rakyat has the lowest total amount that have to repay

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TheB ar ChartsOf TheMonthly Repaym ent (RM)

170 165 160 155 150 145 BANK RAKYAT CIMB BANK Monthly Repayment (RM)

The graph shows that Bank Rakyat has the lowest monthly repayment while CIMB Bank has the higest monthly repayment

RATE OF BANK INTEREST (%)

REPAYMENT PERIOD (RM)

AMOUNT OF INTEREST (RM)

AMOUNT THAT HAVE TO BE REPAY (RM)

MONTHLY REPAYMENT (RM)

Bank Rakyat

3.00 %

5 years

RM 1200

RM 9200

RM 153.00

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Based on our researched and calculation, we have made our final decision and agree to choose Bank Rakyat loan as our personal loan. It gives us more benefits than other bank. Why do we choose Bank Rakyat scheme loan? First of all, the Bank Rakyat scheme loan gives us the lowest rate of interest. The rate of interest is only 3.00%. The total amount of interest for 5 years is RM 1 200. It is the lowest compare with the CIMB Bank. Therefore the amount that we have to pay back is about RM 9200. Furthermore, after we found that we only have to pay RM 153.00 per month. It is affordable according to our personal loan budget. With the lowest payment, it can less our burden when paying the loan each month. Our personal loan budget is RM 160.00. Therefore, we could have a balance about RM 7. Hence, we can use this RM 7 as our extra monthly saving.

REFLECTION BY: MOHD FAIQ BIN AB. LATIF

In this assignment, we were given a task to plan a budget proposal for monthly and annual expenses based on monthly income and relevant deductions to make a personal loan. We need to identify at two banks whether from Islamic or Conventional Financial Institutions and find out the various offers given by the Financial Institutions. After that, we have to make a comparison between the banks before deciding the best bank as a personal loan. I have no idea on how this assignment going to finish and to be done. Moreover, I have never do any loan before. Of course, it is something too fresh for me. However, after presenting in the class, I started to get cleared and idea on how to start. Lecture and friends help me to understand all about loan. We also went to the library and served the internet to find some additional information. Although it was very difficult task for new students like us, it gave us an

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important experience in finding information. At the end, we were very happy and grateful as we had completed our assignment successfully on the right time. It showed our courage and patience to fulfill the task given. Thank you.

REFERENCES

BOOKS
Jean Luttrell Weirich, 1983, Personal Financial Management, published by Little Brown and Company Rosli Mahmood, 1998, Perbankan dan Pemberian Pinjaman, published by Utusan Publication and Distributors Sdn. Bhd.

INTERNET
http://en.wikipedia.org/wiki/Commercial_bank http://www.alacrastore.com/storecontent/moodys/PBC_109641 ttp://en.wikipedia.org/wiki/Islamic_bank

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 http://education.yahoo.com/reference/dictionary/entry/loan http://en.wikipedia.org/wiki/Loan http://en.wikipedia.org/wiki/Interest http://www.answers.com/topic/interest

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