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A boy's parents gave him R30 000 for his 21st birthday. His parents said that they had invested a sum of money on his 10th birthday that had grown at 13,5% p.a. CI for 11 years. How much was invested 11 years ago?
Mathematics
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4 stepsIdentify the given values and the compound interest formula.
The future value () is R30 000.
The annual interest rate () is 13.5% or 0.135.
The number of years () is 11.
We need to find the principal amount () that was invested.
The compound interest formula is:Substitute the given values into the formula.
Calculate the term .
Solve for .
The amount invested 11 years ago was R7 200.00.
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