John has saved $1000 and is evaluating 2 option for the bank deposits for a period of 5 y

Bank A - Bank A is offering 6% per annum simple interest

Bank B - Bank B is offering 5.5 % per annum compound interest

Can you help john to identify which of the two option is more beneficial for him

Bank A Bank B

P 1000 P 1000
r 0.06 r 0.055
t 5 t 5

Year Interest Year Interest Old P New P

1 60 1 55 1000 1055
2 60 2 58.025 1055 1113.025
3 60 3 61.21638 1113.025 1174.241
4 60 4 64.58328 1174.241 1238.825
5 60 5 68.13536 1238.825 1306.96

Total 1300 Total 1306.96

ank deposits for a period of 5 years

erest

ore beneficial for him

 John is evaluating two investment opportunities for investing $10,000

Option A - Buy a car worth $10000, it will give $2000 for 5 years and he can sell it for $40
of 5th year

Option B - loan $10,000 to his trustworthy friend, for which he will get $500 for first 2 ye
next 2 years and $3000 for next 3 years

Can you help john to identify which of the two option is more beneficial for him. Risk Fre
in bank saving account is 6 %

Option A Option B

P 10000 P 10000
r 0.06 r 0.06
Value 4000 Value 0

Year Return Year Return

1 2000 1 500
2 2000 2 500
3 2000 3 2000
4 2000 4 2000
5 2000 5 3000
6 3000
Total ₹ 11,413.76 7 3000
Total ₹ 10,531.95
 ting $10,000

5 years and he can sell it for $4000 at the end

ch he will get $500 for first 2 year, $2000 for

more beneficial for him. Risk Free interest rate

 John has taken advice and is now considering in investing in a car, but he has come acros
opportunity

Option A - Buy a car worth $10000, it will give $2000 for 5 years and he can sell it for $40
5th year

Option B - The government is offering a special scheme in which you will get double the
$8000 for 6 years

Can you help john to identify which of the two option is more beneficial for him. Risk Fre
bank saving account is 6 %

Option A Option B
+
P 10000 P 8000
r 0.06 r 0.06
Value 4000 Value 0

Year Return -10000 Year Return

1 2000 2000 1
2 2000 2000 2
3 2000 2000 3
4 2000 2000 4
5 2000 6000 5
6 16000
Total ₹ 11,413.76 10% Total ₹ 15,094.34

.
 in a car, but he has come across a new

5 years and he can sell it for $4000 at the end of

n which you will get double the money if you invest

more beneficial for him. Risk Free interest rate in

 The Bank X is offering a special scheme in which you will get payment according the f

Help john find the NPV and IRR for this investment opprtunity

Date Amount Type

1/1/2021 10000 Investment
5/16/2022 2000 Payout 1
9/28/2023 3000 Payout 2
2/9/2025 4000 Payout 3
6/24/2026 5000 Payout 4

Rate 0.06

Date Amount
1/1/2021 -10000
5/16/2022 2000
9/28/2023 3000
2/9/2025 4000
6/24/2026 5000
ill get payment according the following payment schedule.

prtunity