Your friend has just inherited SAR75,000. He is considering two investments as follows: Opening a...

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Your friend has just inherited SAR75,000. He is considering two investments as follows: • Opening a savings account that would carn an annual interest rate of 4.15% compounded annually. If your friend does not withdraw the money for two years, the interest would increase by 10 basis points to 4.25% for any year thereafter without withdrawal. • He could deposit his money in a savings account which can carn a simple interest of 4.8% per year (the interest is not reinvested) for a minimum of five years without withdrawals. Which investment would be better over 5 years. Your friend has just inherited SAR75,000. He is considering two investments as follows: • Opening a savings account that would carn an annual interest rate of 4.15% compounded annually. If your friend does not withdraw the money for two years, the interest would increase by 10 basis points to 4.25% for any year thereafter without withdrawal. • He could deposit his money in a savings account which can carn a simple interest of 4.8% per year (the interest is not reinvested) for a minimum of five years without withdrawals. Which investment would be better over 5 years.

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