Caselet B 5 Marks

Ali wants to construct his house after 10 years and the estimated fund required for the same is Omr. 125000. He needs to choose a better option for making investment today, help him to decide which the better option is by calculating time value of money for the following:

1. Investment in a Mutual Fund which pays 10.5% interest for 5 years
2. A Bank deposit which pays 10.5% interest for 5 years but discounting is done monthly.
3. Which of the two options should he accept? Why
4. Assume yourself in place of Ali and share which investment would you prefer from the available investment opportunities in Oman? (A real example from Oman)