Question

One of your ancestors made sure you would live a good life. He invested AED 10000 at 5% interest in a fund for your 100 years ago. (a) How much would the investment be worth today? Clearly show your workings. [10 marks] (b) What is the effect of compounding? Demonstrate clearly the interest on interest earned. [10 marks] (c) Would you invest the amount you obtained in part (a) in a UAE villa in Jumeirah, based on the economic climate today? Explain your answer. [10 marks]

One of your ancestors made sure you would live a good life. He invested AED 10000 at 5% interest in a fund for your 100 years ago.

(a) How much would the investment be worth today? Clearly show your workings. [10 marks]

(b) What is the effect of compounding? Demonstrate clearly the interest on interest earned. [10 marks]

(c) Would you invest the amount you obtained in part (a) in a UAE villa in Jumeirah, based on the economic climate today? Explain your answer. [10 marks]

Answer 1

ANSWER

(a)

FV = PV x (1+r)ⁿ

PV = 10,000

r = 5%

n = 100

FV = 10,000 x (1+0.05)¹⁰⁰

FV = 10,000 x 131.5012578

FV = AED 1,315,012.58

(b) compounding effect = NO . of times investmetn compounded

Initial investment = 10,000

Value today = 1,315,012.58

compounding = 1,315,012.58 / 10,000

= 1,315 times

(c) YES , i will invest in jumeirah my investment acculmulated over 100 years based on its economic conditions

i will invest i the following ways -

REAL ESTATE

Palm Jumeirah is one of the most prolific projects in the world of real estate. An ambitious man-made island with some of the most spectacular apartments, villas, hotels and even theme parks, it’s not an exaggeration to call this the eighth wonder of the world and a true marvel of engineering. The Palm, as the area is fondly called, has always been one of the best areas to invest in the Dubai real estate market. Today, in 2018, nearly twelve years after the first properties for sale on Palm Jumeirah were handed over in 2006, the area remains a hotspot for real estate investments in Dubai. If you are planning to buy a property this year, take a look at the best areas to invest in Palm Jumeirah for both apartments and villas and enjoy the splendour of waterfront living in one of the most well-known locations in the world.

One of the most sought-after communities to buy apartments in the Palm is in the Shoreline Apartments. A premium development by master builder Nakheel, these buildings make a good choice for those looking to invest in Palm Jumeirah. The cluster of 20 buildings with high-end apartments is located on the trunk of the Palm with 10 buildings facing the beach and the remaining ten on the inner edge of the trunk. The freehold flats for sale in Shoreline Apartments come with luxury amenities including gyms, health clubs, swimming pools, 24-hour security, double glazed windows, and of course, fantastic waterfront views.

The next popular area to invest in Palm Jumeirah is The Crescent. Located at the far end of the Palm, these apartments are some of the most luxurious flats you will encounter in the UAE property market. The Muraba Residence, Dream Palm Residence, The 8 and Kempinski Palm Residence are some of the opulent apartment buildings you could consider if you are planning to invest in this region of the Palm. The Crescent is also where many of the upscale hotels such as Rixos, Kempinski and Waldorf Astoria are located, making it one of the most vibrant communities to live in the Palm. When it comes to configurations, there are studios, 1,2,3 and even 4-bedroom apartments here. As per current listings, the lowest prices for the apartments in the Crescent are predictably for the studios with prices starting at AED 1.5M.

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