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Hannah invests R 6500 for 6 years. For the first 3 years, the interest rate is 12% per annum, compounded annually. She then withdraws R 4200. For the remaining 3 years, the interest rate is 8% per ann

Mathematics

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Answer

A. R 6212.94\text{A. R 6212.94}

Step-by-step solution

4 steps
  1. Calculate the amount in the account after the first three years.

    The formula for compound interest is A=P(1+r)tA = P(1 + r)^t.
    Given:

    • Principal (PP) = R 6500
    • Interest rate (rr) = 12%12\% per annum =0.12= 0.12
    • Time (tt) = 3 years
    A1=6500(1+0.12)3A_1 = 6500(1 + 0.12)^3 A1=6500(1.12)3A_1 = 6500(1.12)^3 A1=6500×1.404928A_1 = 6500 \times 1.404928 A1=9132.032A_1 = 9132.032
  2. Subtract the withdrawal amount to find the new principal for the next period.

    Hannah withdraws R 4200.
    New principal (P2P_2) = A1−4200A_1 - 4200

    P2=9132.032−4200P_2 = 9132.032 - 4200 P2=4932.032P_2 = 4932.032
  3. Calculate the amount in the account at the end of the next three years (total six years).

    Given:

    • New principal (P2P_2) = R 4932.032
    • Interest rate (rr) = 8%8\% per annum =0.08= 0.08
    • Time (tt) = 3 years
    A2=4932.032(1+0.08)3A_2 = 4932.032(1 + 0.08)^3 A2=4932.032(1.08)3A_2 = 4932.032(1.08)^3 A2=4932.032×1.259712A_2 = 4932.032 \times 1.259712 A2=6212.9409...A_2 = 6212.9409...
  4. Round the final amount to two decimal places.

    The amount in the account at the end of the six years is R 6212.94.

    This matches option A.

    The final answer is A. R 6212.94\text{A. R 6212.94}.

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