At the beginning of every year, a man deposited $ 10,000 in a financial institution which paid compound interest at the rate of 20% p.a. He stopped further deposits after three years. The Money remained invested in the financial institution for a further eight years.

(a) How much money did he have at the end of the first three years? (4 marks)
Amount =p (1+ r)^n
= 10000(1+.2)3
=17,280
(b) How much interest did the money generate in the entire period? (4 marks)
Amount – interest
Amount = p (1 + r)^n
=10000(1.2)8– 10000
= 429998.17 – 10000
=32998.17

To calculate the amount of money the man had at the end of the first three years, you can use the compound interest formula:

Amount = Principal * (1 + rate)^time

In this case, the principal (initial deposit) is $10,000, the rate is 20% (or 0.2), and the time is 3 years.

So, the calculation would be:

Amount = $10,000 * (1 + 0.2)^3
= $10,000 * (1.2)^3
= $10,000 * 1.728
= $17,280

Therefore, the man had $17,280 at the end of the first three years.

To calculate the interest generated in the entire period, you need to subtract the original principal from the total amount at the end of the period.

Amount - Principal = Interest

In this case, the principal is still $10,000, and the amount at the end of the period is given by the compound interest formula:

Amount = $10,000 * (1 + 0.2)^8
= $10,000 * 1.2^8
= $10,000 * 4.2999817
= $42,999.817

So, the interest would be:

Interest = $42,999.817 - $10,000
= $32,999.817

Therefore, the money generated a total interest of $32,999.817 in the entire period.

(a) The man had $17,280 at the end of the first three years.

(b) The money generated $32,998.17 in interest during the entire period.