Question

Tshego won R165 000 and decided to deposit 65% of this amount in an account earning 8,25% interest per year, compounded every four months. The accumulated amount after five years is

[1] R248 203,55

. [2] R151 490,63.

[3] R247 862,83.

[4] R161 110,84.

[5] R161 332,31

Answer 1

Solution:

Given, P= R 165,000

Deposit amount = 65% of P

r = 8.25% ,n = 4, t = 5

PV $=65\% \times R\ 165,000$

$\Rightarrow PV =R\ 107250$

$A=p(1+\frac{r}{n})^{nt}$

$\Rightarrow A=107250×(1+\frac{8.25\%}{4})^{4×5}$

$\Rightarrow A=R\ 161332.31$

Hence option (5) is correct.