Question

. Mr. Ahmet, who won a prize of 1 million USD by participating in a quiz show, will

provide a significant return if he uses it in repo, time deposit and bonds. However, careful decisions need to be

made as to which area to invest. If the money is deposited in the bank, the bank pays interest once a month and

pays 16% interest. Mr. Ahmet wants to buy 2 houses, one worth 900000 USD and the other 500000 USD, in the

future, by investing this money in the bank. Accordingly, after how long is it possible for Ahmet Bey to buy these

two houses with the money and income he earned? If you were Mr. Ahmet, how would you advise him to use

this money?​

Answer 1

See below

Explanation:

Mr. Ahmet needs:

• (900000 + 500000) - 1000000 = 400000

more to have enough money to buy those two houses.

Monthly, he gets interest paid:

• 1000000*0.16/12 = 13333.33

Time to have required amount is:

• 400000/13333.33 = 30 months = 2.5 years

Without taking the deposit he would need time:

• 1400000/13333.33 = 105 months = 8 years and 9 months to buy two houses

He could wait and use the interest to buy houses provided they will still be available and price remains same.