Answer to Question #93860 in Financial Math for Sphesihle thobela

Question

Thando has R4500 in his savings Account. The bank pays him a compound interest rate of 4.25% p.a. Calculate the amount Thando will receive if he decides to withdraw the money after 30 months

Answer 1

Firstly convert the time in months to annum

Month is 30 then corresponding annum or year is 30/12=2.5years

Future benefits after 2.5years of withdrawal

$=4500(1+0.045)$^2.5

=R5,023.46336