Question

Ajay Aglecha a Senior Citizen wants to deposit Rs. 5 lacs which is his retirement benefits in the Term Deposit of a Bank for a period of 5 years. He has the following options to select from. Which one would you advise and justify your reason. a. Under its Scheme A Privilege Bank gives interest at 10% p.a for a deposit kept for 5 years, which is compounded annually. b. Privilege Bank gives interest at 8% p.a for a deposit kept for 5 years, which is compounded half yearly. c. Super Bank gives interest at 7.5% p.a for a deposit kept for 5 years, which is compounded quarterly. d. Super Bank gives interest at 8% p.a for a deposit kept for 5 years, which is compounded annually.

Answer 1

they have the following options to choose from and we will advise them (c) super bank gives interest at 7.5 p.a for a deposit kept for 5 year which is compounded quarterly