Answer to Question #193106 in Financial Math for Barent

Question

Vhutshilo 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.     R247 862,83.

2.     R151 490,63.

3.     R248 203,55.

4.     R161 110,84.

5.     R161 332,31.

Answer 1

given,

p= R 165,000

DEPOSIT AMOUNT = 65% OF P

R = 8.25%

M = 4

N = 5

PV $=65\% \times R 165,000$

$PV =R 107250$

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

$A=107250×(1+\frac{8.25\%}{4})^{4×5}$

$A=R161332.31$

Hence option 5 is correct.