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hmed has two options Option a: An investment of OMR. 150000 in a bond which pays 6.05% interest for 9 years Option b: A Bank deposit of OMR. 150000 which pays 6.75% interest for 9 years but compounding is done quarterly. Calculate future value. Select one: a. Option a: 244499.70, Option b: 253983.50 b. NONE c. Option a: 254499.72, Option b: 273983.10 d. Option a: 215499.75, Option b: 273983.20

hmed has two options Option a: An investment of OMR. 150000 in a bond which pays 6.05% interest for 9 years Option b: A Bank deposit of OMR. 150000 which pays 6.75% interest for 9 years but compounding is done quarterly. Calculate future value. Select one: a. Option a: 244499.70, Option b: 253983.50 b. NONE c. Option a: 254499.72, Option b: 273983.10 d. Option a: 215499.75, Option b: 273983.20

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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hmed has two options Option a: An investment of OMR. 150000 in a bond which pays 6.05% interest for 9 years Option b: A Bank deposit of OMR. 150000 which pays 6.75% interest for 9 years but compounding is done quarterly. Calculate future value.
Select one:
a.
Option a: 244499.70, Option b: 253983.50
b.
NONE
c.
Option a: 254499.72, Option b: 273983.10
d.
Option a: 215499.75, Option b: 273983.20
Expert Solution
Step 1

Option a:

Investment (P) = OMR 150000

Interest rate (r) = 6.05%

Duration (n) = 9 years

 

Option b:

Investment (P) = OMR 150000

Interest rate (r) = 6.75% per annum = 1.6875% per quarter

Duration (n) = 9 years = 36 quarters

 

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