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A bank is offering 2.501% interest on an investment of 7 years. If you invest OMR 10000 today what will be the value of the investment on maturity? Select one: a. 11887.66 b. 51108.60 c. 29887.66 d. NONE

A bank is offering 2.501% interest on an investment of 7 years. If you invest OMR 10000 today what will be the value of the investment on maturity? Select one: a. 11887.66 b. 51108.60 c. 29887.66 d. NONE

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A bank is offering 2.501% interest on an investment of 7 years. If you invest OMR 10000 today what will be the value of the investment on maturity?
Select one:
a.
11887.66
b.
51108.60
c.
29887.66
d.
NONE
Expert Solution
Step 1

Future value is the value of present cashflow compounded to future date.

formula:

FV=PV×1+RN

where,

FV=future value

PV=present value

R=interest rate

N=number of years

steps

Step by step

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