Interest is the actual amount of money earned or paid for the use of money over a period. The interest rate is the percentage at which interest is calculated, usually expressed annually.

Alright Mazindela — let's do this. 3.1 Interest is the actual amount of money earned or paid for the use of money over a period. The interest rate is the percentage at which interest is calculated, usually expressed annually. 3.2 Step 1: Calculate the total number of months Mr. Molopa saved. Number of months = 2 years × 12 months/year = 24 months Step 2: Calculate the total amount saved. Total amount saved = R800/month × 24 months Total amount saved = R19200.00 This is the amount he would be able to invest. 3.3 Step 1: Identify the principal amount, interest rate, and investment period. Principal (P) = R19200.00 (from 3.2) Interest rate (i) = 12.5% p.a. = 0.125 Investment period (n) = 2.5 years Step 2: Use the compound interest formula to calculate the future value (A). A = P(1 + i)^n A = R19200.00(1 + 0.125)^2.5 A = R19200.00(1.125)^2.5 A = R19200.00 × 1.32986076... A = R25533.3266... A = R25533.33 This is how much he will earn at the end of the investment period. 3.4 Step 1: Calculate the total interest earned. Interest Earned = Future Value - Principal Interest Earned = R25533.33 - R19200.00 Interest Earned = R6333.33 Got more? Send 'em!