We read your photo as:

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.

Economics

ScanSolve AI Answer

Answers

3 parts
3.2

R19200.00\text{R}19200.00

3.3

R25533.33\text{R}25533.33

3.4

R6333.33\text{R}6333.33

Step-by-step solution

5 steps

Part 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.

Part 3.2

R19200.00\text{R}19200.00

  1. Calculate the total number of months Mr.

    Molopa saved.

    Number of months=2 years×12 months/year=24 months\text{Number of months} = 2 \text{ years} \times 12 \text{ months/year} = 24 \text{ months}

  2. Calculate the total amount saved.

    Total amount saved=R800/month×24 months\text{Total amount saved} = \text{R}800/\text{month} \times 24 \text{ months} Total amount saved=R19200.00\text{Total amount saved} = \boxed{\text{R}19200.00}

    This is the amount he would be able to invest.

Part 3.3

R25533.33\text{R}25533.33

  1. Identify the principal amount, interest rate, and investment period.

    Principal (PP) = R19200.00 (from 3.2)
    Interest rate (ii) = 12.5% p.a. = 0.125
    Investment period (nn) = 2.5 years

  2. Use the compound interest formula to calculate the future value (AA).

    A=P(1+i)nA = P(1 + i)^n A=R19200.00(1+0.125)2.5A = \text{R}19200.00(1 + 0.125)^{2.5} A=R19200.00(1.125)2.5A = \text{R}19200.00(1.125)^{2.5} A=R19200.00×1.32986076...A = \text{R}19200.00 \times 1.32986076... A=R25533.3266...A = \text{R}25533.3266... A=R25533.33A = \boxed{\text{R}25533.33}

    This is how much he will earn at the end of the investment period.

Part 3.4

R6333.33\text{R}6333.33

  1. Calculate the total interest earned.

    Interest Earned=Future Value−Principal\text{Interest Earned} = \text{Future Value} - \text{Principal} Interest Earned=R25533.33−R19200.00\text{Interest Earned} = \text{R}25533.33 - \text{R}19200.00 Interest Earned=R6333.33\text{Interest Earned} = \boxed{\text{R}6333.33}
Was this helpful?

Try one yourself

A new problem that tests the same skill.

Still stuck on this one?

Ask a follow-up, and the answer starts from this question.

Got a different question?Ask your own question

More Economics Questions

QCalculate the amount of interest paid during the financial yearQCalculate the annual interest rate given the principal amount, simple interest earned, and time…QExplain the concept of interest, calculate the monthly interest rate for ABCBank, state an advantage…QThe monthly interest rate is given as 0.55\%. To find the annual rate, multiply the monthly rate by…QCalculate the annual interest rate that was used on the balance brought forward to obtain the credit…
Browse by topic:Macroeconomics
See all Economics questions →
Got a syllabus? Photograph it and I'll tell you what's due and what's worth the most.