A Separate Peace Essay Example for Free

A Separate Peace Essay It is important to confront reality, no matter how harsh it is. People will always face difficult situations, but avoiding them is often more dangerous than the situation itself. In his novel, A Separate Peace, Knowles explores what can happen when a person or even an institution tries to avoid painful circumstances. In the story, Gene, the protagonist, and his friends are students at the Devon boarding school; and the troubling issues they face are wars, the external, World War II, and the intimate conflicts that often arise between close friends. Knowles uses the motif of the transformation of Devon, Finny, and Gene to show the importance of confronting head-on the wars within and around them. Devon boarding school shields Gene and his classmates from the hardships of World War II. Gene’s class, the â€Å"Upper Middlers,† are too young for the draft. This causes the teachers at Devon to see them as the last evidence of â€Å"the life the war was being fought to preserve† (29). The teachers are afraid to expose the boys to the terror of war and so they hide it from them. While throughout the country, others participate in the war effort, Gene and his classmates remain apart and spend their time â€Å"calmly reading Virgil† (24). Because of this separation, the war becomes â€Å"completely unreal† (24) to the Upper Middlers. The entire world appears to be churning in the upheaval of the war, but Devon tries to remain the same, shielding the boys from its hardships. Unfortunately, when the effects of the war inevitably come to Devon, its attempts at avoidance result in a negative transformation with bitter and unintended consequences. In its efforts to deny the war’s existence, Devon changes from idyllic and relaxed in the Summer Session to rigid and uncompromising in the Winter Session. In the summer at Devon, the boys play games on the â€Å"healthy green turf brushed with dew† to the calming sounds of â€Å"cricket noises and the bird cries of dusk† (24). Such imagery makes Devon seem like a peaceful oasis for the Upper Middlers. However, this relaxed atmosphere of the Summer Session ends with Finny’s fall from the tree at Devon River. Jumping from the tree was an activity originally designed to prepare soldiers for war and Finny’s injury from it represents the boys’ first experience with the pain that war brings. To Devon, Finny’s fall proves that the relaxed atmosphere of the Summer Session could not protect the boys from the reality of war. As a result, Devon rejects the carefree environment of the Summer Session and changes into a strict school where â€Å"continuity is stressed† (73) in the Winter Session. This transformation proves negative as evidenced by Knowles stark change in his description of the Winter Session. For example, while in the Summer Session the boys freely roamed the â€Å"healthy green turf† of Devon’s fields, they crowd into the dark â€Å"Butt Room† a smoking room that Gene compares to a â€Å"dirty dungeon in the bowels of the dormitory† (88). Where once the boys played in beautiful fields, they are now confined in close, dark rooms. Gene further classifies the transformation as negative by immediately remarking that â€Å"peace [has] deserted Devon† (72) when he returns for the Winter Session. In attempting to avoid the effects of the war, Devon sacrifices its status as a haven for the boys. When the reality that the world is at war inevitably strikes Devon, its transformation makes it less able to deal with the effects of the war. Gene compares the inexorable arrival of the war to the snow that blankets the school grounds. He calls the snowflakes â€Å"invaders† that cover the â€Å"carefully pruned shrubbery bordering the crosswalks† and likens them to the â€Å"invasion of the war on the school† (93). In making this comparison, Gene seems to show that just as Devon’s â€Å"carefully pruned shrubbery† cannot escape the snowfall, its structured atmosphere cannot escape the war. In fact, it is that structured atmosphere that makes the war seem all the more attractive to the very boys Devon tried so desperately to protect. Representing this is the Upper Middlers’ decision to clear snow from train tracks designed to transport troops. This is their first serious contribution to the war effort and requires that they travel away from Devon, symbolizing their desire to leave their school and participate in the war effort. As they work, the boys see a train car of soldiers whom they view as â€Å"elite† in comparison to their â€Å"drab ranks† (101). Directly after seeing the troops, all they boys can discuss is the â€Å"futility of Devon and how [they] would never have war stories to tell [their] grandchildren† (102). The boys see Devon’s strict unchanging atmosphere as inadequate amidst the upheaval of the war. As a result, the Upper Middlers slowly reject Devon, resigning from clubs, leaving the school to enlist in the war, and losing their academic vigor. They resent Devon for keeping them from the war and remain forever distant from it. Gene exhibits this distance when he describes Devon after graduating. Gene calls Devon a â€Å"hard and shiny† (11) museum; he feels no connection to it. He finally concludes that â€Å"The more things stay the same, the more they change after all† (14). In trying to remain untouched by the war, Devon changed to a school that pushed its students to the very war it tried to avoid. Like Devon, Finny does not accept the hardships or existence of war in his life. Throughout the story, Finny embraces the glorified aspects of war, but refuses to accept its atrocities. For example, Finny wears his pink shirt to celebrate the Americans bombing of Central Europe. However, when he realizes that the bombing killed women and children, he tells Gene that he doesn’t think the bombing took place. He does not want to believe that innocent people are often casualties of war. Eventually, Finny decides that the war cannot exist because it causes too much suffering. Similarly, Finny calls Gene his â€Å"best pal† (48) and openly displays his affection for him. However, when Gene confesses to deliberately jouncing him from the limb out of jealousy, Finny refuses to listen. He cannot accept that a friend could become an enemy. Eventually, Finny’s denial of the conflicts in his life lead to a negative transformation. In trying to retain his rejection of the war, Finny changes from a confident, athletic leader into an embittered invalid. In the summer, Finny excels, becoming a natural leader of the boys and easily winning over teachers. Finny is also physically impressive as evidenced by Gene’s description of him playing in the Devon River. Gene says that Finny is in â€Å"exaltation,† with glowing skin and muscles â€Å"aligned in perfection† (34). In this description, Finny seems like an ideal, almost God like figure, completely in control and confident. Finny’s injury at the end of Summer Session, however, signals a dark transformation. Gene shakes the limb Finny is standing on while about to jump off the tree at Devon River and Finny falls and breaks his leg. Because Gene deliberately jounced Finny out of a tree used to prepare the seniors for war, Finny’s fall and subsequent injury symbolizes a forced confrontation with the potential pain of World War II and the war between Gene and himself. Rather than working through the hardship and pain, Finny rejects his former status as an athlete and leader and lets his injury define him as an isolated invalid. Instead of using his athletic abilities to overcome his injury, Finny seems to remain permanently maimed. Although his leg heals and his cast becomes so small that an â€Å"ordinary person could have managed it with hardly a limp noticeable† (157), Finny’s gait is permanantely changed. His inability to heal completely from his injury symbolizes his inability to confront and move on from the conflicts that caused it. Similarly, Finny loses his place as a leader among the Upper Middlers. When Finny returns to Devon for the Winter Session, he finds that the war dominates the Upper Middlers’ conversations. Finny does not believe the war exists and so he isolates himself and stops spending as much time with his peers. Where once he was a natural leader, he becomes an outcast to preserve his disbelief in the war. Finny’s negative transformation makes him more vulnerable to the wars in his life. At the end of the Winter Session, Brinker conducts a mock trial and convicts Gene of his role in Finny’s injury. Finny is again forced to face the reality of Gene’s jealousy. Furthermore, during the trial, Finny speaks to Leper for the first time after his return from the army. Leper’s insanity, induced by the war, forces Finny to confront its painful implications. Because of Finny’s transformation, he is even more susceptible to these implications. Symbolizing this are the events following the mock trial. After Brinker convicts Gene, Finny falls while trying to run away. He re-breaks his leg, reopening the wound of the summer and revisiting the pain of the wars in his life. Where before the injury only crippled Finny, this time, Finny eventually dies from it. Just as his invalid state made him more vulnerable to re-injuring his leg, Finny’s transformation in response to the war made him more vulnerable to it. Unlike Devon and Finny, Gene faces the reality of the war around him and his inner struggle with Finny. While Gene enjoys the peaceful atmosphere of Devon in the Summer Session, he recognizes its inadequacies. Gene explains, â€Å"Perhaps I alone knew Devon had slipped through their [the professors’] fingers during the warm over looked months† (73). Gene realizes that the Summer Session, and the realities it avoided, would be the undoing of Devon. Furthermore, while the other Upper Middlers deny the existence of the war, Gene understands it at a deep level. Gene explicitly says, â€Å"The war was and is reality for me† (32). He embraces the war instead of masking it. Similarly, Gene recognizes the inner war with Finny. Gene knows that he deliberately jounced the limb of the tree so that Finny would fall. He repeatedly tries to confess this to Finny, openly and inwardly confronting his jealousy. Finally, when Leper goes to war and is discharged for mental instability, Gene is the only student who visits him in his home and sees him in his worst state. Gene is able to witness the shock and horror of the war. Because of his ability to face the wars around and within him, Gene undergoes a positive transformation. Gene confronts the conflicts in his life and uses them to mature from a fearful, insecure boy to a balanced and strong man. Initially, Gene identifies the presence of fear in his life. As an adult reflecting on his childhood, Gene can see â€Å"with great clarity the fear [he] had lived in† (10). Gene is also initially in-athletic. While Finny garners many athletic awards, Gene does not often participate in sports and focuses on his studies. This makes Gene feel inferior to Finny and so he often succumbs to Finny’s desires, often at the expense of his own academic success. Gene feels inadequate and insecure in the Summer Session, but the Winter Session signals a change within him. Before returning to Devon for the Winter Session, Gene visits Finny and confesses his guilt. After confronting his jealousy and confessing to Finny, Gene returns to Devon and becomes increasingly independent and secure. Symbolizing this is Gene’s experience in the Naguamsett River. On his first day back to Devon, Gene falls into the â€Å"ugly, saline,† (79) waters of the Nagaumasett. Incidentally, Gene calls this encounter with the filthy waters a â€Å"baptism.. on the first day of this winter session† (79). This use of the word baptism, a term associated with initiation or rebirth, seems to convey that Gene is beginning a new life. Just as he emerges renewed from the gritty disgusting waters of the Nagaumasett, he emerges renewed from his painful, uncomfortable confrontation of his inner war with Finny. Directly following Gene’s â€Å"baptism,† Finny returns to Devon as an invalid and he and Gene’s roles reverse. Now, It is Finny who needs Gene, both physically and emotionally, to help him deal with his injury and his functioning at Devon. Gene’s sudden athletic prowess represents this role reversal. Since Finny cannot participate in sports, he trains Gene. As he excels in his training, Gene notices that Finny seems â€Å"older. nd smaller too† (121). He then realizes that he is actually bigger and Finny is only smaller by comparison. Gene has used the conflict in his life to leave behind his insecurities and become a strong, independent man. Gene’s transformation proves positive as it enables him to grow from the conflicts in his life. The results of the mock trial do no break Gene like the do Finny. He has already confronted his jealousy and guilt, and is secure enough to withstand the pain. Likewise, when Gene finally graduates from Devon and enlists in the army, he endures the war without losing his sanity like Leper. Gene is able to do this because he â€Å"already fought [his] war† (204) at Devon. He learned to confront harsh realities, and therefore can overcome them. As an adult, Gene is able to return to Devon content and secure, having made his â€Å"escape from† (10) the fear that plagued his childhood. His ability to confront his wars enable him to mature through them. Devon, Finny, and Gene all transform throughout the story. However, Devon and Finny changed to avoid the war, but Gene changed to grow from it. These transformations and stark difference in their outcomes powerfully convey the importance of unflinchingly confronting wars without and within.

Business Card Etiquette Essay Example for Free

Business Card Etiquette Essay Business Card Etiquette: A Must Master Have you ever experienced how mortifying it is when you’re asked for a business card and you don’t have any? Either you forgot to bring one or run out of business cards, this incident is embarrassing both to the asker and to the one being asked for. Habitually forgetting the business cards is the most famous neglect that someone makes when it comes to business card etiquette. In the business world it is important to always remember the business card etiquette as this would speak much of you and the business that you are representing. So, what do we have to be harking backed to when it comes to business card etiquette? First, it is always helpful to have a system to remember to bring a bunch of cool business cards with you every time. Put it in a business portfolio or your purse or desk drawer or a cool business card holder, whichever is applicable and more convenient for you. As one of your most important marketing weapon, a cool business card should always be present in business meetings and basically everywhere. This system would also save you from doing the same mistake that most forgetful entrepreneurs do. The second business card etiquette you should be dredging up on is that it should present creativity. Creative business cards not only state your name, contact numbers, or company logo. The style itself should discourse what kind of service you do or product you provide. You might even want to try cool digital business cards if you’re on the PC or electronic business world. Creative business cards give respect to the card giver and receiver alike. Third thing to consider in business card etiquette is the poise of the card. Cool business cards make the receiver want to keep the card for some reasons like future reference or simply because it is something likable. Either way, cool business cards promote boost in the owner’s individuality. The last and most important thing to ruminate in business card etiquette is the manner on how you present your card. Handing over wrinkled, torn or stained business cards give a reflection on how you see the receiver. This is a big no, especially when you’re dealing with CEOs and managers of companies. Also, it is but proper not to present business cards during personal or emotional correspondence like condolences, get well soons, and even congratulations. So, you can understand that business card etiquette is as much as important as the card itself. Mastering it not only brings potential income to the business but a lasting impression of good reputation as well. Design diaries batch 2 (9-28) 9. China  Travel Depotwww. chinatraveldepot. com Anyone planning to travel along China might want to browse www. chinatraveldepot. com, the official website of the top destination service provider of the country. The site provides information regarding China activities, flights, hotels, tour packages, cars rental, Yangtze cruises, top China tours, prices, and promotions. Basically, what they offer is within- China travel services. But they also provide an option for add- on international travel services by teaming up with Expedia, one of the leading online tour operator in the world. The company also deals with the possibility of customization options and packages to provide the perfect travel destination. China Travel Depot serves over 60 chain stores and outlets located all over China. 10. Extreme Piewww. xtremepie. com It’s up for the hippies to search for the biggest surf, snow, ride, and skate brands online at www. extremepie. com. Nike, Oakley, Nixon, Jansport, Billabong, Converse, Sanuk, Roxy, Havaianas, Element, and Reef are just some of the wide array of brands to choose from. The site features a full assortment of styles that are hip for the current season. Products are categ orized as to usage (by ladies, men, and kids), gift items, and hardware. Extreme Pie offers their customers with a 110% price promise and a good pact of 90 day returns policy(both subject to company’s discretion). The company also gives a deal of free delivery for UK Mainland residents at some point detailed in the terms. 11. Fitness Footwear  www. fitnessfootwear. com If someone is looking for quality footwear, fitnessfootwear. com is a must- visit site for him. Trendy and superior footwear from brands like Adidas, Birkenstock, Reebok,The North face, Under Armor Tactical, New Balance, Havaianas, Merrell, Vivo Barefoot, Fitflop, Hi- Tec, and Saucony are in store at www. fitnessfootwear. com. Another great feature of this site is that it has a shoe size converter for UK, Europe, and USA shoes. Visitors can choose from the variety of Running, Toning, Casual, Outdoor men’s and women’s shoes, insoles, socks, and accessories. To top all that, product updates, promotions, and discounts are given to customers who sign up to the FitnessFootwear. com newsletter. 12. Moonbasawww. moonbasa. us Moonbasa is powered by Mola Group, a China- based company established in 2007, which currently have 800 employees. They specialize in women underwear and clothing but also offer other products such as shoes, handbags, home textile used outdoors and indoors, and Euro- style apparel. They have an elite staff of hunting professionals like Terry Drury, Mark Drury, Jay Gregory, Spook Span, Ronnie â€Å"Cuz† Strickland, Hank Parker, Rick Kreuter, Keith Beam, and more. The company started in the 70’s when the owner, Pete Shepley, experimented with new ideas for bow release aids. From flexible plastic arrow vane to replace the feathers, he trialed to the perfection of his first compound bow. Today, the line of PSE products vastly includes Pro Series Bows, Main Line Bows, Field Ready Bows, Recurve Bows, and a lot more.

The Independence Of Malaysia History Essay

The Independence Of Malaysia History Essay Malaysia was declared a new nation on 16 September 1963.This occurred six years after independence. Nobody expected Malaya to become Malaysian in such a short time. This is an idea of unification had been voice by David Marshall who suggested that Singapore unite with Malaya(1955).The idea was also sounded by Ghazali Shafie(1954) and Tan Cheng Lock(1955). Tunku Abdul Rahman and Lee Kuan Yew agreed that Singapore and Malaya should join together. Tunku Abdul Rahman was developed an idea when he stated his readiness to accept not just Singapore but also Sarawak, Brunei British North Borneo after they had obtained their independence and they should join voluntarily. In 1961, federation of Malaysia is created by Britain and the Malayan Prime Minister. The creation of Malaysia is to merging the British colonies including Borneo and Singapore with already independent Malaya. The president of Indonesia, Sukarno denounced that the plan of create a federation of Malaysia is a neo-colonialist plot, because it maintain the British presence in the region and also claimed that it denied the Borneans their legitimate right to national self determination. So under his leadership, Indonesia embarked on a policy of Confrontation, exerting diplomatic economic and military pressure against British and Malaya. BACKGROUND 27th May 1961, Tunku Abdul Rahman having a speech in Singapore. The speech is about the foreign Correspondents Association of South-East Asia, to put forward a public feeler for a plan. This plan is for closer the political and also economic co-operation between the Borneo protectorate of Brunei and the Borneo colonies of Sarawak and North Borneo. This speech is seen as marking at least to the public for beginning of the Malaysia project. In July 1961, the leaders of all the territories which might form Malaysia had an opportunity to confer on the subject in a regional meeting of the Commonwealth Parliamentary Association. In this meeting, Malaysian Solidarity Consultative Committee was set up with representative from each of the five territories (Malaya, Singapore, North Borneo, Brunei and Sarawak), the aim of this committee included the collection of views and opinions between this five country. In November 1961 the two Prime Ministers signed a Heads of Agreement document for a mer ger between the Federation of Malaya and Singapore. In the same month, Tunku Abdul Rahman visited London and reached agreement in principle with the British government on the idea of Malaysia. The British and Malayan governments that they convinced the plan of the Federation of Malaysia included the five country was a desirable aim. The merger agreement was noted with satisfaction and additional note was taken of defence arrangements. Failing to influence Malaya, President Sukarno launched a confrontation policy against Malaya on 20 Jan 1963. Sukarnos grounds for opposing the information of Malaysia because leader of Malaysia ignore Indonesia in Malayas plan to set up a new country while Indonesia was neighbour and friend to Malaysia. Sukarno claim Malaysia to be a new kind of political structure that would ignore Indonesias interest and weaken spirit of the Malay Archipelago. President Sukarno argued that Malaysia was a puppet of the British, and that the consolidation of Malaysia would increase British control over the region, threatening the independence of Indonesia. At that time, Indonesia-Malaysia confrontation between Indonesia-Malaysia was an undeclared intermittent war over the future of the island of Borneo, between British-backed Malaysia and Indonesia during 1962-1966, called Konfrontasi. 3) The REASONS that led the confrontation a) Personality Problem Hostility of Indonesia to the formation Malaysia comes from several reasons and have shown below. On 20 January 1963, the Indonesian Foreign Minister, Dr Subandrio, who was a leftist, announced a policy of confrontation towards Malaya. It was a complete reversal of Indonesian policy to oppose the existence of Malaysia. Sukarno who was strongly engaged in communism subsequently declared a Confrontation policy on Malaysia from January 1963 to August 1966. As a result, the actual and undeclared war between Malaysia and Indonesia began in early 1963. Indonesia put a halt to all diplomatic relations with Malaysia during this period. Besides that, Indonesian troops began launched a series of cross-border raids, sabotage and attempted subversion into Malaysian territory to reach a political understanding. In May 1963, Tunku Abdul Rahman and President Sukarno held talks and agreed held a plebiscite before the Federation was formed. Sukarno stated that Indonesia would not stand in the way if the people of North Borneo supported the suggestion of Federation. However, on 9 July 1963, Tunku Abdul Rahman signed the London Agreement and settled down the formation of the Federation of Malaysia on 31 August 1963. On 27 July 1963, President Sukarno announced a ganyang Malaysia or Crush Malaysia campaign for a response. On 23 September 1963, Sukarno proclaimed himself as President-for-Life and declared that Indonesia must gobble Malaysia raw. Military units of Indonesia infiltrated Malaysian territories but were intercepted before they could establish contact with local dissidents. The intermittent war waged by Indonesia was marked by armed incursion, acts of subversion, bomb attacks and destabilisation. State Entry Exit Population Combat Forces Losses Malaysia 1963 1966 13000000 80000 25000 Indonesia 1963 1966 153000000 200000 20000 The confrontation came to an eventual end when Sukarno was replaced by Suharto as the president of Indonesia. Consequently, a peace treaty was signed between both countries in Jun 1966. b) Economic There were several reasons that caused the Malaya to reconsider this merger after it had experienced steady economic development and improved the standard living of its community. So Tunku Abdul Rahman was keen on a merger with Singapore was for economic purposes. Singapore had a large population and a large number of industrial firms, Complements the important trading ports in the region, one position. The Borneo territories, and fertile agricultural grounds that produced rubber pepper and much more , and on the other hand, boasted of richness in natural resources such as timber, oil and natural gas. Tunku Abdul Rahman believes that the merger of these colonies is much value to the Malayan. Tunku Abdul Rahman was also seeking to liberate these colonies from colonization. 4 years ago, Malaya had already achieved its independence. While Singapore practiced to a large extent, a self-governing policy, British control Sarawak and Sabah were still very much. The other factor is the stronghold of communism in Singapore. Over time, they did not stop their activities. But the leadership of Lee Kuan Yew of Singapore is in the mid-50s strike frustrated, if anyone with the dispute continued. They hope to find favour, and to soften their blow. But the Communist Party they continue their activities. Eventually formed his own political party, they were forced to resign the government, because they are known as the Socialist Front, after the firm. He afraid to face the risk of Malaya, the Chinese Communists decided to support both sides of their allies in Malaya, Tunku Abdul Rahman and Singapore believe that the merger will allow the easy handling the Communist Party. Apart from Singapore, Communism was also thriving in Sarawak, they formed an underground Communist association which moved through worker associations, student and farmers. c) Communist In 1955, Singapores main population consists of Chinese, Malayan about the effects on the structure of other ethnic groups, especially the Malays. Also worried about the activities of the Communist Party of any natural rampant, Malaya and the impact may hinder the struggle to eliminate the threat of communism. Singapore was afraid to face the risk of Communist. Tunku Abdul Rahman and Singapore believe that the merger will allow the easy handling the Communist Party when the plan of the Malaysia was success. d) Natural Resources The other why the confrontation occurs in between Malaysia and Indonesia is about the natural resources in some countries like Sabah, Sarawak, Brunei and Singapore. As we know natural resources is quite important to make a profit for a country. Malaysia and Indonesia need these countries due to the richer natural resources. Sabah is located on the northern portion of the island of Borneo. It is the second largest state in Malaysia after Sarawak. It contains the richest natural freshwater fisheries in Malaysia. This variety of habitats is rich in wildlife including orang utan, proboscis monkey, hornbill and marine turtle, as well as plant life such as the Rafflesia, pitcher plant and a unique array of wild orchid. Besides that, there are a number of wonderful natural resources such as beaches, green hill, tall mountains and rainforest. Therefore, the eco tourism is one of the main attractions for the tourism. Sarawak is known to international visitors primarily because of the extraord inary natural wonders of its national park, including Gunung Mulu, the Niah Caves, and Bako. Sarawaks cultural treasures are also fascinating, reflecting the influence not only of the states many ethnic peoples, but also the odd western influence of Sarawaks White Rajahs. Sarawak also rich in petroleum and natural gas. Sarawak is one of the worlds largest exporters of tropical hardwood timber. Sarawak is also well endowed with both metallic and non-metallic mineral resources. Resources such as silica sand, kaolinitic clay and coal provide vast potential for value-added processing. Good quality kaolinitic and ball clay deposits suitable for manufacture of paper and ceramic products. There are huge investment opportunities are waiting for investors in agro based industries. The processing of agricultural commodities such as oil palm, pepper, rubber and sago, thus increasing value added. Sarawaks vast reserves of natural resources, largely untapped, are a source of promising opportunit ies in the field of biotechnology. With its bountiful and well-managed natural resources is capable more resources-based industries and great opportunities for growth. That why Indonesia wants Sabah and Sarawak to form its country. Brunei is the third largest oil producer in Southeast Asia after Indonesia and Malaysia. So its natural resources are petroleum, natural gas, timber. Petroleum is useful for transportation and mechanical fields, while natural gas is for coalgas and timber have many uses such as paper, logging industries and so on. With this condition sure Malaysia and Indonesia will loot for it and the misunderstandings is come to pass. Singapore is a city-state with not much land area and it is not particularly rich in natural resources. Natural resources in Singapore can be categorized into non renewable resources, renewable resources and water resources. Non-renewable resources such as coal, oil, and natural gas is limited for Singapore and their economy is dependent o n oil and natural gas imports. Renewable resources like bio mass, an utilization energy stored in organic matter mostly depend by Singapore. Examples of biomass include wood, leaves, animal waste, crops, bones, and scales. Biomass is stored solar energy that can be converted to electricity or fuel.  But it has to find out a solution to the problem of lack of land. With quite a number richest of natural resources in these countries for sure it may be the hot for be in charge of by others. Due to this reason Malaysia and Indonesia are included in vie to these richest land and cause a lot of confront between them. Conclusion The fighting lasted nearly four years, however General Suhartos replacement of Sukarno, Indonesia interest in pursuing the war with Malaysia declined and combat eased. A useful favor in the containment of the Indonesian forces was the use of intelligence. Britain had broken the Indonesian military and diplomatic ciphers and was able to intercept and decrypt communication from a Government Communications Headquarters (GCHQ) listening station in Singapore. The war had been a strictly limited war and a cheapo one for Britain and Malaysia for which it achieved much. Indeed it clearly and decisively resulted in preventing Indonesia interfering with the creation of Malaysia. Arguably it had not been in the interests that the British or the Indonesians to extend hostiles outside Borneo. An alleged communist led coup in September 1965, which saw the deaths of sic leading generals, led to the successful counter coup by General Suharto (6.1921). The ensuing military assumption of power removed Sukarno and effectively ended confronts, though this was not officially announced until 1966. At the height of confronts an estimated 15000 to 30000 Indonesian soldiers and irregulars tried to infiltrate the Malaysia border while 80000 British personnel were stationed in the south-east Asian. British troops in Borneo assisted by Malaysia forces were spread thinly along the border to limit incursions. Not only just British and Malaysian troops but also Australians and New Zealanders help Malaya to protect their country from the attacking by Indonesia. British In this strategy, all about deterrence and military operations was very successful include the insurgency to a low level of conflict. But this confrontation required an important deployment of Britains limited resources and manpower. In early 1965, Britain had send the army to protect Malaya. Starting in December 1963, the British repeated requests for New Zealand and Australia to send combat forces to the Borneo to assist the insurgency. The Foreign Office advised the Cabinet in 1964 that As long as our conflict with Indonesia keeps unofficial and bilateral, we keep hold of the initiative. Britains choice to set up Malaysia was guided by defence needs, in particular the need to defend the massive military base in Singapore and at the same time create economies in defence expenses New Zealand On the other hand, Willington was eager to avoid New Zealand becoming involved in a major war with Indonesia. Because of the policy, New Zealands relations with its closest Asian neighbour could be poisoned for generations to come. Finally, the government initially refused to send troops into Borneo, because the British and Malaysian forces already enough to deal with the problem. America When the period from 1963 to 1966, the confrontation between Malaysia and Indonesia. American relations as it represents the first direct involvement of the United States into the politic affairs of Malaysia. In fact, in August 1961 when the British Commissioner-General for Southeast Asia, Lord Selkirk, visited Djakarta for the purpose of conculting with the Indonesians about the formation of Malaysia,the Indonesian Foreign Minister, Subandrio, indicated that his country was agreeable to the plan. Subandrion reiterated Indonesian approval in a letter to the New York Times on 13 November 1961 and in a speechto the United Nations General Assembly on 20 November when he said that Indonesia had no objectionsto the proposed merger based on the will of the peoples concerned. At the last, the New Guinea problem had been settled. Australia Australia made it clear that if Malaysia were subjected to armed invasion or subversive activity supported from outside, then Australian military assistance would be added to that of the Malaysian and British. RAN warships in the Strategic Reserve were available for patrol and escort ops. The Philippines President Macapagal claimed Sabah was originally a part of Philippines territory. The formation of Malaysia thus complicated his efforts to claim Sabah. As an indication of his objection to the information of Malaysia, Macapagal broke of diplomatic between Philippines and Malaysia. Communists On the night of the 30th September 1965 a coup attempt, in which Indonesian communists became involved, occurred in Indonesia. Six senior Generals were killed. The coup failed and was followed by widespread violence and bloodshed. It proved a turning point for confrontation, which declined thereafter and on 13th August 1966 a formal agreement concluded between Indonesia and Malaysia bringing the conflict to an end.

The Impact of the Industrial Revolution on the Life and Health of the British People :: Free Essays

The Impact of the Industrial Revolution on the Life and Health of the British People Trade and industry changed dramatically during the Victorian period. The invention of new machines and the growth of factories affected the working lives of many people. The invention of steam power meant that many jobs could now be done by machines and steam powered machines meant that more goods could be made and much faster than before, when they were made by hand. When manufacturers realised this, they put their machines into huge factories so that all the work could be done in one place. Coal was needed to help make steam to power the machines. Many Victorian factories were built near coalmines to make it easier to get the coal to the factory. The coal mining industry grew. Many workers were needed to keep the new machines running in the factories and more workers were needed to work in the coalmines. Huge industrial towns grew around the factories as people moved to factory areas to look for work. In 1800, 75000 people lived in Manchester. By 1850, more than 300 000 people lived there. This made more goods for sale at home and abroad. The revolution had many impacts on Victorian life and many people benefited from industrialization but many people did not. For most people the Industrial Revolution was a good thing. Farm workers now had machines to help them and owners of the new factories and mills were making lots of money from the goods, made in their factories, being exported and sold. New inventions such as the telegraph and the typewriter created different kinds of jobs. However, for many people, life was made much more difficult. Factory workers had no rights and had to work long hours in dreadful conditions for a very low pay. The new machines were often not very safe and the workers' lives were at risk when they were running them. Factory owners exploited their workers, especially women and children. But people were desperate for work and those without jobs were not

The Jungle :: essays research papers

The Jungle, due to the federal legislation it provoked, became one of the most impressionistic books of the twentieth century. Americans were horrified to learn about the terrible sanitation under which their meat products were packed. They were even more horrified to learn that the labels listing the ingredients in canned meat products were blatant fabrications. The revelation that rotten and diseased meat was sold without a single consideration for public health infuriated American citizens. They consumed meat containing the ground remains of poisoned rats and sometimes unfortunate workers who fell into the machinery for grinding meat and producing lard. Within months of The Jungle's publication, the sale of meat products dropped dramatically. The public outcry of indignation led to the passage of the 1906 Pure Food and Drug Act.   Ã‚  Ã‚  Ã‚  Ã‚  However, Sinclair did not write The Jungle to incite the American government into regulating the sanitation of the meat packing industry. The details regarding the unsanitary and disgusting conditions in meat packing factories are background details of a much larger picture. The Jungle was written in order to provoke outrage over the miserable working conditions of industrial wage labor. He detailed the lack of sanitation in the factories in order to provoke sympathy and outrage for the impoverished factory workers. The germs and disease inside the meat packing establishments were indeed a public health concern, but it was far more of a concern for the workers. He also portrays the various sicknesses they suffer as a result of their working environments.   Ã‚  Ã‚  Ã‚  Ã‚  The Jungle is also an appeal to Socialism. He follows Jurgis's Lithuanian immigrant family into the disgusting tenements and meat packing factories of Chicago. There, they suffer the loss of all their dreams of success and freedom in America. They find themselves leashed to the grinding poverty and misery of the city slums despite all their best efforts. Sinclair's purposes for writing the novel included displaying the evils of capitalism as an economic system.   Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  Jurgis suffers misfortune after misfortune, and he joins the union only to see the union fail to improve working conditions. His wife and child die in rapid succession. He becomes a wandering tramp, the victim of the casual cruelty of those better off than he. Finally, he joins the Chicago criminal underworld where money comes easily to him for the first time since his arrival in America. However, that fails to save him as well. He returns to the remnants of his family only to discover that Marija has become a prostitute. Another member of the family, Stanislovas, is dead, having been eaten alive by a swarm of rats in

The Fabry Disease :: essays research papers fc

The Fabry Disease Classification   Ã‚  Ã‚  Ã‚  Ã‚  The Fabry Disease is a hereditary disorder, caused by the lack of alphagalactosidase A. It is an x-linked recessive inheritance. Therefore it is the females that carry it. The ones who are mostly affected by this disease are the males. Female carriers, though, may develop angiokeratomas and may have problems with burning pains. Very few of the carriers may also have kidney or heart problems. This disease occurs in 1 of 40,000 people. Descriptions   Ã‚  Ã‚  Ã‚  Ã‚   A person with the Fabry disease develops angiokeratomas, which are clusters of raised, dot-like lesions. Appearing during childhood or puberty in the genital and thigh areas, these angiokeratomas increase in size and number. Other symptoms of this disease are burning pains in hand or feet, nausea, vomiting, abdominal pains, dizziness, headaches and generalized weakness. Swelling of the legs, caused by the gathering of lymph, a yellowish body fluid, under the skin may also occur. Skin will show telangiectasis, inflated intra- epidermal (intra - within, epidermal - outer layer) spaces filled with blood. Places (vessel wall) where there is no telangiectasis are filled with deposits of glycolipids. These deposits are also found in the heart, muscles, renal tubules and glomeruli, central nervous system, spleen, liver, bone marrow, lymph nodes and cornea. Retarded growth, delayed puberty and ocular abnormalities are also common symptoms. These symptoms are mostly fond in males because they display full-blown syndrome, while females displays a partial form. Diagnosis   Ã‚  Ã‚  Ã‚  Ã‚  They firsts take a urine sample, which is the first place where they would find anything. Then they would take a blood, bone marrow and ophthalmologic examination.

Financial Maths

FINANCIAL MATHEMATICS 1. RATE OF RETURN 2. SIMPLE INTEREST 3. COMPOUND INTEREST 4. MULTIPLE CASH FLOWS 5. ANNUITIES 6. LOAN REPAYMENT SCHEDULES Financial Math Support Materials Page 1 of 85 (1) RATE OF RETURN FINANCIAL MATHEMATICS CONCERNS THE ANALYSIS OF CASH FLOWS BETWEEN PARTIES TO A CONTRACT. IF MONEY IS BORROWED THERE IS AN INTIAL CASH INFLOW TO THE BORROWER BUT AFTERWARDS THERE WILL BE A CASH OUTFLOW IN THE FORM OF REPAYMENTS. A person borrows $100 and promises to repay the lender $60 after 1 year and $60 after 2 years. Show the resulting cash flows for the borrower and lender. Financial Math Support MaterialsPage 2 of 85 Time Now 1 End of 2 years Borrower 0 End of 1 year Lender 2 $100 is loaned out $120 is received back The extra $20 is the lenders compensation for foregoing current consumption to obtain future consumption. The lender requires compensation for: Financial Math Support Materials Page 3 of 85 THE â€Å"TIME VALUE† OF MONEY CONSIDER A CHOICE OF ? $100 NOW, OR ? $100 LATER ANY RATIONAL PERSON WOULD CHOOSE $100 NOW! BUT WHY? â€Å"MONEY HAS A TIME VALUE† Financial Math Support Materials Page 4 of 85 Time Value of Money (TVM) ? Refers to the difference between ? The concept enables ? Provides the means for valuing multiple cash lows that occur at different times The level of interest rates is the index used to determine prevailing TVM. Interest rates are determined by the level of †¦ For every type of financing transaction there is potentially a different interest rate. Interest rates are distinguished by the nature of the underlying transaction and focus on three characteristics: ? ? ? Financial Math Support Materials Page 5 of 85 An important aspect of valuation is applying the appropriate interest rate. For example, valuing a fixed-rate loan to a highly speculative company using a government bond rate is inappropriate; an adjustment must be made reflecting he relative creditworthiness of the borrower. While different TVMs may exist for every borrower and lender, it is the Most financial math formulae are a form of present value calculation; that is, these formulae identify the future cash flows of a financial instrument and then calculate the value at which these instruments could be exchanged for cash today. Financial Math Support Materials Page 6 of 85 RATE OF RETURN Suppose I purchase a watch for $200 and sell it a year later for $250. What is the dollar return and rate of return of this transaction? Financial Math Support Materials Page 7 of 85 Interest Interest a fee for borrowing money – about as old as civilisation itself Prime rate – the interest charged to the largest and most secure corporations. Interest is a cost to business, hence it is very important to understand how it is calculated and how it impacts on the business. There are two basic types of interest Simple Interest and Compound Interest Simple Interest Compound Interest Financial Math Support Materials Page 8 of 85 (2) SIMPLE INTEREST When a financial institution quotes an interest rate for a loan it can do so in different ways. For example, a quote 10% p. a. simple interest has different cash flows than a quote of 10% p. . compound interest payable quarterly. If the quote is offered as a SIMPLE INTEREST RATE, then the rate is taken as a proportion of the initial loan amount. eg 12% p. a. (SIMPLE), is equivalent to 1% per month, or 3% per quarter, or 6% semi-annually. * NOTE – The quoted rate is often referred to as the nominal rate. Financial Math Support Materials Page 9 of 85 SIMPLE INTEREST Suppose we lend $300 and quote a simple interest rate of 8% p. a. What will be the interest and repayment if the loan is made over: (a) six months, (b) one year, (c) three years. (a) 8% p. a. = Interest = Repayment = (b) Interest = Repayment = (c) 8% p. a. =Interest = Repayment = Financial Math Support Materials Page 10 of 85 Symbolically: Interest amount = I = P i t P ~ principal (or amount bor rowed = PV) i ~ rate of interest as a percentage t ~ time is the number of years, or fraction of a year, for which the loan is made The simple interest (I) charged on a loan of $800 for 2. 5 years at 8. 5% is: I = Pit = Simple interest is usually associated with short-term loans, that is, less than 12 months. In the formula time (t) is expressed in years, or fraction of a year. Example: $800 for 9 months at 8. 5% is: I= Financial Math Support Materials Page 11 of 85 Example: $800 for 88 days at 8. % is: I = Pit At the end of the period the amount repaid is: FV = PV(1 + t i) Where t represents the fraction of a year during which the money is borrowed. Financial Math Support Materials Page 12 of 85 SIMPLE INTEREST In general, the amount repayable, or Future Value (FV) of a loan quoted as simple interest is given by: ? ? ? ? f ? i? FV ? PV 1 ? 365 ? ? ? ? ? ? Where: FV – is the future value (amount repayable) PV – is the present value (Principle) f – is the numbe r of days i – is the annual simple interest rate PV = EQUIVALENTLY, Financial Math Support Materials FV ?f? 1+ ? ?i ? 365 ? Page 13 of 85 SIMPLE INTEREST Question 4(a) from 2001, 2nd semester final exam) Leanne buys a watch for $80 and sells it a month later for $85. What nominal annual interest rate of return does she earn? Rate of return in one month = Annual nominal rate = Financial Math Support Materials Page 14 of 85 Principal unknown A borrower can pay an interest amount of $120 at the end of 6 months. If the current interest rate for personal loans is 9% what is the maximum that can be borrowed, that is, what is PV? ? f ? i I ? PV ? ? ? 365 ? I PV ? ?f? ? ?i ? 365 ? Note: Financial Math Support Materials Page 15 of 85 Interest rate unknown A loan of $18,000 for 8 months had an nterest charge of $888. What was the annual rate of interest rate? ? f ? i I ? PV ? ? ? 365 ? I i? ?f? ? ? PV ? 365 ? Financial Math Support Materials Page 16 of 85 Rayleen’s birthday was on the 14th August last year. On this date she received a gift of $4,800 from her family which she placed in an interest earning account at a nominal rate of 5. 75% per annum. If she withdraws all funds in the account on the 8th April this year, how much will she receive? How much interest is earned? August September October November December January February March April 17 30 31 30 31 31 29 31 8 Total number of days = 237 ? ? f FV ?PV ? 1 ? ? ?i ? ? ? 365 ? ? FV = I= Financial Math Support Materials Page 17 of 85 Barns & Co Ltd. currently has a non tradable bank note with a face value of $500,000 that will mature in 85 days. Barns & Co has negotiated with its lender to obtain a loan using the note as security. The lender requires an establishment fee of $440 and charges simple interest of 9% pa. How much will Barns & Co receive, and what is the total cost of the funds? ? ? f FV ? PV ? 1 ? ? ?i ? ? ? 365 ? ? ent ? Establishm ? FV PV ? ? f? ? fee ? ? 1? ? ?i ? 365 ? Cost of funds Cost in simple interest terms Financial Math Support Materials $500,000 – $489,295. 68 = $10,704. 32 = Page 18 of 85 A bill with a face value of $500,000 and term to maturity of 180 days is sold at a yield of 8% p. a. What are the proceeds of the sale? Proceeds = PV ? PV ? FV ?f? 1? ? ?i ? 365 ? $500,000 ? 180 ? 1? ? ? 0. 08 ? 365 ? PV ? $481, 022. 67 Calculate the effective annualised return for a $100,000 investment which earned: ? 6. 5% p. a. for 90 days, then ? 7. 5% p. a. for 60 days, then ? 6. 2% p. a. for 45 days Value of investment after 90 days: 90 ? $100,000 ? 1+ ? 0. 065 = $101,602. 70 ? ? 365 ? Financial Math Support Materials Page 19 of 85 Value of investment after 90 + 60 days:Value of investment after 90 + 60 + 45 days: Value after 195 days = $103,641. 60 Annualised return = Financial Math Support Materials Page 20 of 85 APPLICATIONS OF SIMPLE INTEREST ? TREASURY NOTES ? BILLS OF EXCHANGE ? PROMISSORY NOTES – WHEN CREATED (ISSUED) – WHEN TRADED LA TER We cover these applications in greater detail in a later topic. Financial Math Support Materials Page 21 of 85 (3) COMPOUND INTEREST THE BASIC IDEA: ? PRINCIPAL GENERATES INTEREST ? RE-INVEST INTEREST TO GENERATE STILL MORE INTEREST ? RE-INVEST AGAIN TO GENERATE EVEN MORE INTEREST . . .etc Financial Math Support Materials Page 22 of 85 COMPOUND INTERESTSuppose we invest $100 000 at 10% p. a. with interest payable annually. What annual cash flows result from this investment? $100,000 Invested at 10% Compound Interest $800,000 Amount $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Time in years Financial Math Support Materials Page 23 of 85 A LGEBRAICALLY ? ? ? ? ? ? Balance at end of year ? ? ? ? ? ? ? Balance after ? ? ? ? ? n FV = Financial Math Support Materials Balance at start of year ? ? ? ? ? ? (1? i) years is: PV(1 + i) n Page 24 of 85 G ENERALISING Suppose we invest $100 000 at 10% p. a. with nterest payable annually. What is the future value of this investment after 4 years? FV = $ Financial Math Support Materials Page 25 of 85 T HE POWER OF COMPOUNDING WITH COMPOUND INTEREST, â€Å"SMALL† SUMS NOW BECOME â€Å"LARGE† SUMS LATER (a) $1000 AT 13% pa FOR 50 YEARS : FV = $ (b) $1000 AT 14% pa FOR 50 YEARS : FV = $ Financial Math Support Materials Page 26 of 85 PRESENT VALUE : REARRANGING THE COMPOUND INTEREST FORMULA: PV ? FV n (1 ? i) COMPOUNDING NOW SHOWS THAT â€Å"LARGE† SUMS TO BE PAID LATER ARE WORTH ONLY â€Å"SMALL† SUMS NOW What is the present value of $1 million to be paid in 100 years’ time if the interest rate is 15% pa?Financial Math Support Materials Page 27 of 85 PRESENT VALUE : (Question 5 from 2001 2nd semester final exam) Tran Van Ng is to receive from his parents $1,000, $1,500 and $2,500 in 1 year, 2 years and 3 years respectively if he passes all subjects in his university degree each year. (a) What is the present value of th ese cash flows assuming a discount rate of 9% over the three years? (b) What is the present value of this these cash flows assuming a discount rate of 9% in the first year, 8% in the second year and 6% in the third year? Financial Math Support Materials Page 28 of 85 Present Value (a) PV ? $1, 000 ?1. 09 ? 1 ? $1,500 ?1. 9 ? 2 ? $2,500 ?1. 09 ? 3 ? $4,110. 41 (b) The value today of $2,500 received in 3 years time? 0 1 2 3 $2,500 Financial Math Support Materials Page 29 of 85 Measuring Average Growth Rates COMPOUND INTEREST IS A SPECIAL CASE OF COMPOUND GROWTH WHERE THE GROWTH RATE IS THE SAME EACH PERIOD IN COMPOUND GROWTH GENERALLY, THE GROWTH RATE MAY CHANGE EACH PERIOD IN PRACTICE, GROWTH RATES CHANGE FROM YEAR TO YEAR. WE NEED TO BE ABLE TO CALCULATE THE FUTURE VALUE AND PRESENT WHERE VALUE RATES THROUGHOUT OF OF THE AN INVESTMENT RETURN LIFE CHANGE OF THE INVESTMENT. Financial Math Support Materials Page 30 of 85 Measuring Average Growth RatesSUPPOSE YOU INITIALLY INVEST $1,000 IN AN ASSET WHOSE VALUE CHANGED YEAR BY YEAR, AS FOLLOWS: YEAR GROWTH RATE %pa 1 2 3 4 5 35 15 9 What is the future value of this investment? What is the average annual growth rate of this investment? After 4 years, the value of the asset is : Financial Math Support Materials Page 31 of 85 Measuring Average Growth Rates AVERAGE ANNUAL GROWTH RATE (g) NOTE THAT THE ANSWER IS NOT: Financial Math Support Materials Page 32 of 85 Average Growth Rate Suppose we invest $1million in an asset whose value changes as follows, year 1 growth rate 20% 2 -8% 3 -15% 4 3% What is the future value of this nvestment? What is the average annual growth rate of this investment? Financial Math Support Materials Page 33 of 85 Average Growth Rate The average annual growth rate is : Financial Math Support Materials Page 34 of 85 Average Growth Rate (Question 6(a),(b) from 2001 2nd semester final exam) House prices in Melbourne have soared in the past four years. The median price of a house in Clayton at the end of each year is as follows: 1997 – $122,000 1998 – $135,000 1999 – $147,000 2000 – $185,000 (a) What is the annual compounding growth rate for housing prices calculated at the end of each year, that is 1998, 1999 and 2000? b) What is the average annual compound growth rate for housing prices over this period? Financial Math Support Materials Page 35 of 85 Average Growth Rate (a) 1998 – 1999 – 2000 – (b) ?1 ? r ? ? 3 Financial Math Support Materials Page 36 of 85 Calculating Average Growth rate – continued g = average growth rate The average rate of growth per period over n time periods is: n ? ? ? Value at end – Value at beginning ? 1 + g ? = ? 1 + ? ? Value at beginning ? ? ? ? Solving for g, 1 ? Value at end – Value at beginning ? n g = ? 1 + ? -1 Value at beginning ? ? 1 $185,000 – $122,000 ? 3 ? g = ? 1 + ? -1 $122,000 ? ? 1 ?3 ? g = ? 1. 16793 ? ? ? – 1 = 0. 148869 g = 14. 89% Financial Mat h Support Materials Page 37 of 85 Real (after Inflation) Interest Inflation reduces the purchasing power of money. We require a methodology to adjust rates of return for the impact of inflation. TODAY 1 box of biscuits costs $2. 00 I have $200 I can consume 100 boxes of biscuits IN ONE YEAR Inflation rate (10%) 1 box costs $2. 20 To consume the same quantity of biscuits I will require To have a real return of, say, 4% pa, I need to be able to purchase 104 boxes. Financial Math Support Materials Page 38 of 85 Real (after Inflation) Interest Real increase in consumption of 4%Financial Math Support Materials Page 39 of 85 Real (after Inflation) Interest FORMULA : (1 + q) = (1 + r)(1 + p) where : q is the quoted interest rate r is the real interest rate p is the inflation rate A lender quotes an interest rate of 18% pa for an investment. If the inflation rate is currently at 4% pa, what is the real interest rate earned by the investor ? Rearranging: Financial Math Support Materials (1 + q) = (1 + r)(1 + p) Page 40 of 85 EFFECTIVE and NOMINAL (QUOTED) Interest Rates A BANK LENDS $1,000 AND QUOTES AN INTEREST RATE OF: (a) 12% pa, payable quarterly (that is, 3% each quarter) (b) 12% pa, payable semi-annually that is, 6% each half year) (c) 12% pa, payable annually (that is, 12% at the end of the year) How much interest does the bank earn at the end of one year under each of these three scenarios? Financial Math Support Materials Page 41 of 85 EFFECTIVE and NOMINAL (QUOTED) Interest Rates ? interest rate of 12% pa, payable quarterly REPAYMENTS $30 $30 1 2 $30 3 $30 4 Quarter The value at the end of the year of the interest payment in the The bank has effectively earned : Financial Math Support Materials Page 42 of 85 EFFECTIVE and NOMINAL (QUOTED) Interest Rates ? INTEREST RATE OF 12% pa, PAYABLE SEMI ANNUALLY REPAYMENTS $60 1 $60 2 Half YearThe value at the end of the year of the interest payment in the The bank has effectively earned : Financial Math Support Materia ls Page 43 of 85 EFFECTIVE and NOMINAL (QUOTED) Interest Rates ? INTEREST RATE OF 12% pa, PAYABLE ANNUALLY REPAYMENTS $120 1 YEAR The value at the end of the year of the interest payment is $120 The bank has effectively earned : Financial Math Support Materials Page 44 of 85 EFFECTIVE and NOMINAL (QUOTED) Interest Rates So a quoted (Nominal) interest rate of, 12% pa payable = 12. 55% payable annually. quarterly 12% pa payable = 12. 36% payable annually semi annually 12% pa payable = 12. 00% payable annually nnually To compare interest rate quotations (the nominal interest rate) we refer to an effective interest rate, that is, the interest rate that we would receive if interest were paid once at the end of the year. In the above example: Nominal (Quoted Rate) 12% pa payable quarterly 12% pa payable semi annually 12% pa payable annually Financial Math Support Materials Effective Rate 12. 55% pa 12. 36% pa 12. 00% pa Page 45 of 85 Formula Development If the nominal rate is j percent pa , compounding m times pa, Then after one year the principal, P, becomes: m j? ? S = P ? 1 + ? m? ? (C1) The effective annual interest rate, i, is therefore: = S-P S = -1 P P (C2) Replacing S in (C2) with equation (C1) produces: j? ? P ? 1 + ? m? ? i= P m -1 m j? ? i = ? 1 + ? m? ? Financial Math Support Materials ?1 (C3) Page 46 of 85 Effective and Nominal Interest Rates (a) NOMINAL TO EFFECTIVE If the nominal rate is 15% p. a. payable monthly, then the effective rate is : (b) EFFECTIVE TO NOMINAL If the effective rate is 15% pa then the nominal pa, with monthly payments, is : Financial Math Support Materials Page 47 of 85 Effective and Nominal Interest Rates (Question from 2002 mid semester exam) Abdul Hafahed purchases a car for $5,000 and sells it four months later for $6,000. a) What nominal annual rate of return did Abdul receive? (b) What effective annual rate of return did Abdul receive? (c) If inflation is at 2% pa, what real annual effective rate of return did Abdul receive ? Show your calculations. Financial Math Support Materials Page 48 of 85 Effective and Nominal Interest Rates (a) Four month return Annual nominal return = (b) Effective rate (c) Real annual effective rate : (1 + q) = (1 + r)(1 + p) Financial Math Support Materials Page 49 of 85 Compound Interest Formula j? ? FV = PV ? 1 + ? m? ? n Where: FV = future value PV = principal (present value) j = interest rate per annum as a percentage = mT = total number of periods over which investment is held m = number of interest payments per annum Solving for other terms by rearranging variables: PV = FV j? ? 1+ ? ? m? ? n 1 ? ? ? FV ? n ? j = ? – 1? m PV ? ? ? Microsoft Excel functions: Future value: FV(rate, nper, pmt, pv, type) Present value: PV(rate, nper, pmt, pv, type) Financial Math Support Materials Page 50 of 85 CONTINUOUS COMPOUNDING Nominal interest rate We know j? ? FV ? PV ? 1 ? ? ? m? mT Number of years Number of compounding periods per year What if compounding takes place at every moment, that is ? m ? ? ? . It can be shown that as ? m ? ? then: m j? ? j ?1 ? ? ? e lim ? m ? m where e is the base of natural logarithms (e ? 2. 71828) The Future value formula then reduces to: FV ? PVe jT or, FV ? jT PV ? jT ? FVe e Financial Math Support Materials Page 51 of 85 COMPOUNDING FREQUENCY $1,000 invested for 1 year at 12%: Compounding frequency Payment at end of year Annual Semi-Annual Quarterly Monthly Daily Continuously ? As the compounding frequency increases for a given nominal interest rate, the higher the interest repayments. However the interest repayment reaches a maximum with continuous compounding. Financial Math Support Materials Page 52 of 85Continuously Compounded Returns Nominal interest rate Recall FV ? PVe Using the notation and r where r ? jT . pt ? 1 ? PV pt ? FV pt ? pt ? 1e then Number of years rt pt e? pt ? 1 rt and rearranging we have; ? pt ? ln? e ? ? ln? ?p ? ? ? t ? 1 ? rt and ? pt ? ? rt ? ln ? ?p ? ? ? t ? 1 ? rt is the continuously c ompounding return from time period t-1 to t. Financial Math Support Materials Page 53 of 85 Continuously Compounded Returns pt Note: the term pt ? 1 is referred as the Price Relative. It is the proportional price change from time t-1 to t. The logarithm of the price relative is the continuously compounding return.Continuously compounding returns are often easier to work with. Two important properties: (1) Continuously compounding returns over a period can be added up to give a total continuously compounding return. (2) The average continuously compounding return over a period is the arithmetic average of each individual continuously compounding return. Financial Math Support Materials Page 54 of 85 Continuously Compounded Returns A stock price has a closing price of $3. 00, $3. 25 and $2. 90 over 3 days. What is the continuously compounding return on each day? What is the total and average continuously compounding return? Time 0 1 Price 3. 00 . 25 2 Return 2. 90 Total return from ti me 0 to 2 = Financial Math Support Materials Page 55 of 85 Continuously Compounded Returns An investor is given a choice of: (a) investing at 16. 5% p. a. , (b) investing at 4% per quarter, for 1 year (c) investing at 16. 3% p. a. and compounded daily. (d) 16. 3% p. a. continuously compounding. Which investment is chosen? Financial Math Support Materials Page 56 of 85 Calculate the effective rate in each case. (a) 16. 5% pa (b) (c) (d) Financial Math Support Materials Page 57 of 85 (4) MUTIPLE CASH FLOWS Cash Flow Stream : Future Value 0 1 2 3 $200 3. 5 $450 4 5 6 $800 1 2 3 If interest rate 9%pa = $1,712. 50 1 :$ 2 :$ 3 :$ Stream Future Value Financial Math Support Materials Page 58 of 85 Cash Flow Stream : Present Value 0 1 2 3 $200 3. 5 $450 4 5 6 $800 1 2 3 If interest rate = 9%pa 1 2 3 Stream Present Value = $ Financial Math Support Materials Page 59 of 85 Net Present Value – NPV The present value of the following stream of cash flows, using a discount rate of 7. 5%, is: 0 Cash flows: 1 2 3 $880 $560 $420 4 $980 PV’s =$ Suppose it cost the investor $2,000 to purchase this stream of cash flows, the net present value of this stream is: NPV = -$2,000 + $ =$ outflow Investment projects where NPV ? 0 are viable.Financial Math Support Materials Page 60 of 85 Internal Rate of Return – IRR One period: YEAR $ 0 -1000 1 +1120 Dollar return = $ Equivalently, solve for r : What value of r will produce an NPV = 0 ? PV of $1,120 Using discount Rate of r for 1 period Financial Math Support Materials No discounting required since $1,000 occurs â€Å"now† Page 61 of 85 Internal Rate of Return – IRR Two periods YEAR $ 0 -1000 1 +1120 2 + 25 Clearly, IRR > 12% pa but IRR < 14. 5% pa Why? Because this would be the rate of return if the additional $25 was received in year 1. That is, Thus 12% < IRR < 14. 5% But where in this range is the IRR ?