Mungerilal has two
investment plans A and B, to choose from. Plan A offers interest of 10%
compounded annually while plan B offers simple interest of 12% per annum. Till
how many years is planB a better investment?
Solution:
(1) 3 (2) 4
(3) 5 (4) 6 (5) 7
Answer follows here:
See the table below, for
planwise calculations of accumulative amounts:
A

B


Accumulated
Value

Accumulated
Value


After
1st Year

100(1.1)
= 110

100+12
= 112

After
2nd Year

110(1.1)
= 121

112+12
= 124

After
3rd Year

121(1.1)
= 133.1

124+12
= 136

After
4th Year

(133.1)(1.1)
= 146.41

136+12
= 148

After
5th Year

(146.41)(1.1)
= 161.051

148+12
= 160

Till end of 4^{th}
year, B is the better investmentplan.
Answer (2)
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