Question

Dave and Sandra pool their individual savings of R2 000 each per month and deposit this into a money market account earning 5% interest per annum, compounded annually. What will the balance of the account be at the end of five years?

Answer 1

$principal=4000*12=48000$

$Amount=p(1+R/n)$^nt

P-rincipal

R-interest rate.

n-number of times interest applied per time period.

nt-number of time periods elapsed.

$48000(1+0.05)$⁵

$=R61261.515$

4000=is the principal paid by two monthly.

48000=is the principal fo in a whole year.

61264.515=is the total amount they will have after five years.( Interest and principal)