Question

Siya wants to buy a new state of the art computer for R35 000. He decides to save by depositing an amount of R500 once a month into an account earning 11,32% interest per year, compounded monthly. The approximate time it will take Siya to have R35 000 available is

[1] 70 months.

[2] 40 months.

[3] 115 months.

[4] 54 months.

[5] none of the above.

Answer 1

The time that will be taken by a monthly investment can be ascertained by using the 'Nper' function in Excel. The time taken to accumulate the sum of R35,000 is ascertained below.

Thus, option [4] 54 months is correct.