Question

An insurance investment plan offers a maturity value of ₹5,00,000 after 5 years. If the opportunity cost of capital is 9% compounded annually, calculate the present value of this investment and advise whether it exceeds the investment cost of ₹3,25,000.

A ₹3,00,000 – Overvalued
B ₹3,80,000 – Marginally attractive
C ₹3,24,000 – Near break-even
D ₹3,50,000 – Profitable
E ₹3,60,000 – Good yield
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