On 2 November 2006, Romy saved RM 1,200 in an account that pay 8.6% per annum simple interest. Three years later, he added another RM 500 into the account. Find the amount in his account on 2 November 2012.
After 3 years:
P = Po + Po*r*t + 500,
P = 1200 + 1200*0.086*3 + 500 = $2009.60,
After 6 years:
P = 2009.60 + 2009.60*0.086*3 =
amount = 1200 + 1200(6)(.086) + 500 + 500(3)(.086)
= .....
post it.
I must disagree with Henry's answer.
He is using a combination of simple and compound interest.
The 2009.60 in his first step includes the simple interest earned.
He then includes that in the calculation of simple interest in part 2
That makes it compound interest.
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To find the amount in Romy's account on 2 November 2012, we will need to calculate the interest earned for each year and add it to the initial amount.
First, let's calculate the interest earned from 2 November 2006 to 2 November 2009. We will use the formula for simple interest:
Interest = Principal (initial amount) * Rate * Time
Principal = RM 1,200
Rate = 8.6% per annum = 0.086
Time = 3 years
Interest = 1200 * 0.086 * 3
= RM 309.60
Now, we add this interest to the initial amount:
Total amount after 3 years = Principal + Interest
= RM 1,200 + RM 309.60
= RM 1,509.60
Next, let's calculate the interest earned from 2 November 2009 to 2 November 2012. We will use the same formula:
Principal = RM 1,509.60 (amount after 3 years)
Rate = 8.6% per annum = 0.086
Time = 3 years
Interest = 1509.60 * 0.086 * 3
= RM 388.96
Now, we add this interest to the previous amount:
Total amount after 6 years = Principal + Interest
= RM 1,509.60 + RM 388.96
= RM 1,898.56
Finally, Romy adds another RM 500 to the account, so we add this amount:
Total amount on 2 November 2012 = Previous amount + RM 500
= RM 1,898.56 + RM 500
= RM 2,398.56
Therefore, the amount in Romy's account on 2 November 2012 is RM 2,398.56.