Question

At the end of four years, Romeo deposits R500 into an investment account. If the interest rate on the account is 10% per annum compounded yearly, determine the value of his investment at the end of 4 years.

Answer 1

Here, P=R500, r=0.1,

and t=4

$A=P(1+r)^t$

$=500(1+0.1)^4$

$= 500(1.1)^4$

$=R732.05$

The value of his investment at the end of 4 years is R732.05