Question

How long will it take an investment of R8 000 to mature to R15 000 at a simple interest rate of 11% per annum?

Answer 1

simple interest formula is:

f = p + p × r × t

f is the future value

p is the present value

r is the interest rate per time period

t is the number of time periods.

$F=p+p×r×t$

$F=8000+8000×0.11×t$

$15000=8000+8000×0.11×t$

$15000-8000=8000×0.11×t$

$7000=880×t$

$\frac{7000}{880}=\frac{880}{880}×t$

$t=7.955years$

The investment will take approximately 8 years to mature.