Question

Use excle please
Please solve it with excel

Abdullah AL Hashmi has two brothers studying in the school in standard 5th and 7th .He is planning to
send to UK for getting Masters. As there is increasing inflation in the economy every year Mr Abdullah
is planning to make some smart investment of funds so that after 10 years from now he should be able to
accumulate RO 10,000 for this brother in std 7th and to accumulate RO 12,000 for this brother in std 5th
.
He has come up with two proposals.
Proposal A- Invest in Shares of company
The investment in share will be earning a return of 8%. The amount of investment will be at the end of
every year. The investment will be sold at the end of 10th year.
Proposal – B Invest in Bonds issued by some company
This investment will be made at the end of each year in the Bonds issued by company in Oman. The
investment in Bonds will be fetching a return of 6%. The investment will be sold at the end of 10th year.
You are required to calculate for the above two proposal
a) The investment to be made in each year for Proposal A and
b) The investment to be made in each year for Proposal B

Answer 1

FV OF ANNUITY = P [(1+r)^n - 1]/r

22000 = P [(1+.08)^10 - 1]/.08
22000 = P [2.1589-1]/.08
22000 = P * 14.486
22000/14.486 = P
P = 1518.648

FV OF ANNUITY = P [(1+r)^n - 1]/r

22000 = P [(1+.06)^10 - 1]/0.06
22000 = P [1.7908-1]/.06
22000 = P * 13.18079
22000/13.18079 = P
P = 1669.095