Question

Calculate the extra compound interest received when R18 400,00 invested at 13,2% per annum for 11,5 years, interest paid annually, is invested at the same rate but with interest paid monthly.

Answer 1

interest paid annually:

$FV_1=18400(1+0.132)^{11.5}=R\ 76568.78$

 interest paid monthly:

$FV_2=18400(1+0.132/12)^{11.5\cdot12}=R\ 83267.84$

extra compound interest:

$FV_2-FV_1=83267.84-76568.78=R\ 6699.06$