Question
Smith has surplus funds of Rs.5000. He wants to invest the funds for 2 years. He has four alternatives of investments as follows: A) Investing
Smith has surplus funds of Rs.5000. He wants to invest the funds for 2 years. He has four alternatives of investments as follows: A) Investing in a bank deposit with 10% simple interest; B) Investing in an NBFC deposit with 8% compound interest with annual compounding; C) Investing in another bank deposit with 8% compound interest with quarterly compounding; D) Investing in an investment with 8% compound interest with semi annual compounding. Assume that all the above alternatives are equally risky.
What will be the future value of the money in case of alternative (B)?
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