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26 Sep 2019, 00:47
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Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
35%
(medium)
Question Stats:
71% (02:03) correct
29%
(02:28)
wrong
based on 79
sessions
History
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Not Attempted Yet
An investor has an option to invest in 3 schemes, scheme 1 offering simple interest of 12% per annum for 5 years, scheme 2 offering compound interest of 10% paid annually for 5 years, scheme 3 offering compound interest of 9% paid quarterly for initial 3 years and then compound interest of 12% paid monthly for next 2 years. If all interest paid is reinvested in all schemes and paid along with principal at the end of 5 years, what is the order of attractiveness (high-to-low cumulative amount after 5 years) of the schemes?
A. Scheme 1> Scheme 2 > Scheme 3
B. Scheme 2> Scheme 1 > Scheme 3
C. Scheme 3> Scheme 2 > Scheme 1
D. Scheme 3> Scheme 1 > Scheme 2
E. Scheme 1> Scheme 3 > Scheme 2
A. Scheme 1> Scheme 2 > Scheme 3
B. Scheme 2> Scheme 1 > Scheme 3
C. Scheme 3> Scheme 2 > Scheme 1
D. Scheme 3> Scheme 1 > Scheme 2
E. Scheme 1> Scheme 3 > Scheme 2
29 Sep 2019, 22:53
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Assume we invest $100 in each scheme.
Scheme 1
interest= 100*12/100*5=60
Scheme 2
interest= \([100(1.1)^5]\)-100=61
Scheme 3
interest= \([100(1.0075)^{36}(1.01)^{24}]-100\)=66
Scheme 1
interest= 100*12/100*5=60
Scheme 2
interest= \([100(1.1)^5]\)-100=61
Scheme 3
interest= \([100(1.0075)^{36}(1.01)^{24}]-100\)=66
Kinshook
An investor has an option to invest in 3 schemes, scheme 1 offering simple interest of 12% per annum for 5 years, scheme 2 offering compound interest of 10% paid annually for 5 years, scheme 3 offering compound interest of 9% paid quarterly for initial 3 years and then compound interest of 12% paid monthly for next 2 years. If all interest paid is reinvested in all schemes and paid along with principal at the end of 5 years, what is the order of attractiveness (high-to-low cumulative amount after 5 years) of the schemes?
A. Scheme 1> Scheme 2 > Scheme 3
B. Scheme 2> Scheme 1 > Scheme 3
C. Scheme 3> Scheme 2 > Scheme 1
D. Scheme 3> Scheme 1 > Scheme 2
E. Scheme 1> Scheme 3 > Scheme 2
A. Scheme 1> Scheme 2 > Scheme 3
B. Scheme 2> Scheme 1 > Scheme 3
C. Scheme 3> Scheme 2 > Scheme 1
D. Scheme 3> Scheme 1 > Scheme 2
E. Scheme 1> Scheme 3 > Scheme 2
02 Oct 2019, 14:16
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calculations for this seems tedious. Is there any other way to arrive at the answer ?
