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Case 1: Investment (10 Marks) You are a senior financial advisor of a management consultancy company in the region. Your task includes providing professional advice
Case 1: Investment (10 Marks) You are a senior financial advisor of a management consultancy company in the region. Your task includes providing professional advice to stakeholders. Recommend a financing plan for your client and then explain why your plan is the best way to enhance value. Your client is a young professional, single and working as a management trainee in a retail store. He has OMR 10,000 to invest. The following are the investment options available to the client; Option A: Invest the fund in an account paying simple interest of 10% annually for 10 years. Option B: Invest the fund in an account paying compound interest of 10% annually for 10 years. Option C: Invest the fund in an account paying compound interest of 10% semi-annually for 10 years. You are required to answer the following questions; 1. What would be the amount of interest and the final amount under Option A? (1 Mark) 2. What would be the amount of interest and the final amount under Option B? (1 Mark) 3. What would be the amount of interest and the final amount under Option C? (1 Mark) 4. If he wants to have OMR 25,000 in 10 years to buy a house, how much will he invest now if interest is at 10% compounded quarterly? (3 Marks) 5. Discuss the factors what will increase the future value of the amount. (4 Marks)
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