#Plz i need your help guys (the answer for this question)#
If you deposit sh. 100,000 in a bank which gives 12% interest rate per year. How much will you earn after 1 year and 6 months?
Steve yesterday at 5:42am
That would be 100000 * .12 * 1.5
kelvin yesterday at 12:13pm
Why is it calculated for interest and there is no place indicating it is an interest?
Steve yesterday at 3:29pm
How much will you earn?
you earn interest...
kelvin today at 1:21am
How about this question?
*A richman wants to earn one million shillings in 10 years. What amount should he invest in the bank if the interest rate is 2.5% per year?
It looks like all of your questions are dealing with Simple Interest and that fromula is
Interest = (principal) x (rate) x (time)
Now the richman wants one million shillings in 10 years so Interest is 1,000,000 while time is 10 and the rate is 2.5% so you are looking for the principal amount he has to put into the account.
1,000,000= Px(0.025) x (10)
1,000,000 =0.25P so divide by the 0.25 and you will have the principal the richman needs to invest :)
To answer this question, we need to use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment
P = the principal investment amount
r = annual interest rate (expressed as a decimal)
n = number of times interest is compounded per year
t = number of years
In this case, the principal investment amount (P) is what we need to find. The future value of the investment (A) is given as 1 million shillings, the interest rate (r) is 2.5% per year (0.025 as a decimal), the number of times interest is compounded per year (n) is usually not mentioned, so we will assume it as once (compounded annually), and the number of years (t) is 10.
Substituting these values into the formula, we have:
1,000,000 = P(1 + 0.025/1)^(1*10)
Simplifying the equation:
1,000,000 = P(1.025)^10
To solve for P, we divide both sides of the equation by (1.025)^10:
P = 1,000,000 / (1.025)^10
Using a calculator, we can find the value of (1.025)^10 ≈ 1.280084. Dividing 1,000,000 by 1.280084:
P ≈ 781,250.38
Therefore, the richman should invest approximately 781,250.38 shillings in the bank to earn one million shillings in 10 years with a 2.5% interest rate.