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Q-4. Tina invested $3000 in a bank that pays an annual interest rate of 7% compounded continuously. What is the amount she can get after 5 years from the bank? Round your answer to the nearest integer (5 marks) Solution: Q-5. Consider the following two mutually exclusive alternatives: (15marks) End of year Alternative 0 1 2 3 A (Rs.) - 50,00,000 20,00.000 20,00,000 20,00.000 20,00,000 18,00,000 18,00,000 B (Rs.) - 45,00,000 18,00.000 18,00,000 At i = 18%, select the best alternative based on future worth method of comparison. Draw the cash flow diagram for both alternatives The formula for the future worth of the above cash flow diagram for a given interest rate, i is + FW(i) = P(1 + i)" + Cl(1 + i)*1 + C2(1 + i)r2 + ... + Cj(1 + i)ni +Cn-s Solution Alternative A