Question

A person wishes to have a future sum of Rs.75, 00,000 to start a new business after 10 years
from now. There are two alternatives available. Suggest the best alternative to get the required
future amount under single payment deposit scenario.
Nationalized bank Interest rate =12%, Compounded annually ,
Private bank Interest rate =11%,Compounded quarterly

Answer 1

Answer:

B/A = A/ (A+B)

→Assume, B = Ax (B is some percent of A. So consider that some percent as ‘x’.)

→Ax/A = A/(A+Ax)

→X=1/(1+x)

→X^2+ X -1 = 0

→Solving the above equation, we get 0.62(consider only positive terms),

So the answer is 62%.