2) Your father decides to start saving money for your younger brother university education. . One...

 

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2) Your father decides to start saving money for your younger brother university education. . One of his friends working in Bank suggested two different plans. In Plane A- your father needs to deposit Rs. 50,000 every six months at 8% annual interest rate compounded semianmally. In Plan- B your father needs to deposit Rs. 100,000 every year with 9% interest rate compounded nnnually. The initial deposit in plan A would be after six months from now, and initial deposit in Plan B would be after one year from now. Required; (8 marks) i) ii) i) In Plan A what would be the future value by the end of 15 years? In Plan B what would be the future value by the cnd of 15 years? Which of the plan your father would choose and why? How the increase and decrease in interest rate would affect the future value of plan. Should your father need to consider other plans as well and why? 2) Your father decides to start saving money for your younger brother university education. . One of his friends working in Bank suggested two different plans. In Plane A- your father needs to deposit Rs. 50,000 every six months at 8% annual interest rate compounded semianmally. In Plan- B your father needs to deposit Rs. 100,000 every year with 9% interest rate compounded nnnually. The initial deposit in plan A would be after six months from now, and initial deposit in Plan B would be after one year from now. Required; (8 marks) i) ii) i) In Plan A what would be the future value by the end of 15 years? In Plan B what would be the future value by the cnd of 15 years? Which of the plan your father would choose and why? How the increase and decrease in interest rate would affect the future value of plan. Should your father need to consider other plans as well and why?

Answer rating: 100% (QA)

2 i Plan A requires a sixmonth deposit of 50000 and pays an interest rate of 8 compounde... View the full answer