Rayan international school is managing by a board of trustees and they are worrying about the funds required for school maintenance in coming academic years due to economic crisis created by COVID-19. In order to face this problem, the board of trustees decided to deposit a certain sum of money in Bank Muscat account which pays interest at 12% (simple interest), so that it will give an interest of OMR 10,000 per year, which can be used for the school maintenance in coming academic years. a) How much money board of trustees need to deposit in bank account? b) If there is already an amount of OMR 70,000 in the school bank account, then how much additional money the board of trustees need to deposit? c) If school invests same amount of money at 12% compound interest compounded monthly, will they get more interest than simple interest?. Give reasons to your answe
Rayan international school is managing by a board of trustees and they are worrying about the funds required for school maintenance in coming academic years due to economic crisis created by COVID-19. In order to face this problem, the board of trustees decided to deposit a certain sum of money in Bank Muscat account which pays interest at 12% (simple interest), so that it will give an interest of OMR 10,000 per year, which can be used for the school maintenance in coming academic years. a) How much money board of trustees need to deposit in bank account? b) If there is already an amount of OMR 70,000 in the school bank account, then how much additional money the board of trustees need to deposit? c) If school invests same amount of money at 12% compound interest compounded monthly, will they get more interest than simple interest?. Give reasons to your answe
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 19P
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Rayan international school is managing by a board of trustees and they are worrying about the funds required for school maintenance in coming academic years due to economic crisis created by COVID-19. In order to face this problem, the board of trustees decided to deposit a certain sum of money in Bank Muscat account which pays interest at 12% (simple interest), so that it will give an interest of OMR 10,000 per year, which can be used for the school maintenance in coming academic years.
a) How much money board of trustees need to deposit in bank account?
b) If there is already an amount of OMR 70,000 in the school bank account, then how much additional money the board of trustees need to deposit?
c) If school invests same amount of money at 12% compound interest compounded monthly, will they get more interest than simple interest?. Give reasons to your answer
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