Suppose you received a bonus of R25000, and you decide to save this bonus for an overseas trip five years from now. You decide to invest it in a fixed deposit but must choose between two fixed deposit options. Suppose Bank ABC pays 11.10% per annum (compounded quarterly) on a 5-year fixed deposit. Across the street, Bank XYZ also offers a 5-year fixed deposit but offers to pay 11% interest, compounded monthly

Answer rating: 100% (QA)

To determine which fixed deposit option is better well calculate the future value of the bonus after ... View the full answer