Assuming that you graduated on December 31st 2020 from the University of Buraimi and immediately on the 1" of January 2021, you started working with the Royal Oman police in Muscat. Your salary is 600 OMR monihly and you decided to save 300 OMR at the end of every month beginning from the end of January 2021. You put your monthly savings of 300 OMR into a bank Muscat savings account and the bank agree to pay you a simple interest of 10% per annum. You made this savings for 20 years. At the end of every year you collect your savings together with the simple interest carned in Bank Muscat and take it to Bank Sohar and put it in an account that pays you a compound interest of 10% compounded annually.
Assuming that you graduated on December 31st 2020 from the University of Buraimi and immediately on the 1" of January 2021, you started working with the Royal Oman police in Muscat. Your salary is 600 OMR monihly and you decided to save 300 OMR at the end of every month beginning from the end of January 2021. You put your monthly savings of 300 OMR into a bank Muscat savings account and the bank agree to pay you a simple interest of 10% per annum. You made this savings for 20 years. At the end of every year you collect your savings together with the simple interest carned in Bank Muscat and take it to Bank Sohar and put it in an account that pays you a compound interest of 10% compounded annually.
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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Question
Q123) please answer correct need
Transcribed Image Text:SIMPLE AND COMPOUND INTEREST CASE STUDY
Assuming that you graduated on December 31st 2020 from the University of Buraimi and
immediately on the 1 of January 2021, you started working with the Royal Oman police in Muscat.
Your salary is 600 OMR monihly and you decided to save 300 OMR at the end of every month
beginning from the end of January 2021.
You put your monthly savings of 300 OMR into a bank Muscat savings account and the bank agree
to pay you a simple interest of 10% per annum. You made this savings for 20 years.
At the end of every year you collect your savings together with the simple interest camed in Bank
Muscat and take it to Bank Sohar and put it in an account that pays you a compound interest of 10%
compounded annually.
Questions:
a)
What is the amount of simple interest you earn cach year in Bank Muscat?
b)
What is the total amount that you saved yearly without the simple interest?
What is the total amount (principal + simple interest) you have in bank Muscat at the end of
every year that you transferred to bank Sohar.
c)
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