A father wants to have R16000 available for his sons education on his 18th birthday. Calculate the amount he must invest on his sons 10th birthday at 14% compounded interest?
No of years 18−10=8years18-10=8 years18−10=8years
Rate = 14100=0.14\frac{14}{100}=0.1410014=0.14
16000=P(1+0.14)816000=P(1+0.14)^816000=P(1+0.14)8
16000=P(1.14)816000=P(1.14)^816000=P(1.14)8
P=16000(1.14)8=5608.94P=\frac{16000}{(1.14)^8}=5608.94P=(1.14)816000=5608.94
The amount he should invest is R5608.94
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