Sasha Investment Financial Puzzle
Sasha is thinking about investing 20.000 dollars in a company, which offers him a five-year plan of divident payment at the end of each year: At the end of the first year, he will get 2000 dollars. At the end of the second year, he will get 4000 dollars. At the end of the third year, he will get 6000 dollars. At the end of the fourth year, he will get 6000 dollars again, and at the end of the last year of payment plan, he will get 5000 dollars.
What is the maximum interest rate a bank could offer to Sasha, so that the investment in the company is more payable for him than making a deposit in a bank?
Total Money Sasha gets by dividends = 2000+ 4000+6000+6000+5000 = 23000
Therefore Sasha gets extra 3000 by investing in the company.
Bank :
1. Simple interest :
20,000 * 5*r/100 < 3000
therefore r < 3
2. If Compound interest :
20,000 ((1+r/100)^5 -1) < 3000
therefore r < 2.83
Your Answer
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