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Q3 A) An investment advisor approaches you and proposes two investment opportunities. Since both investments mature after 20 years, it requires to make 20 deposits.
Q3 A) An investment advisor approaches you and proposes two investment opportunities. Since both investments mature after 20 years, it requires to make 20 deposits. The first investment pays you 11 percent interest where you are supposed to deposit LKR 60,000 at the end of each year. The second investment requires you to deposit LKR 48,000, immediately to start the investment and pays you 12 percent interest. Both investments appear more attractive as you have planned to start a business after 20 years for which you need minimum of LKR 3,500,000. Required: (08 Marks) i. Calculate future value of both investments after 20 years. ii. Select the investment opportunity that is best suited for implementing your plan and explain why you select it. (02 Marks) (142)
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