If i invest R2950 in the bank, the interest rate is 8,10% per month. What will be the value of my money in period of 18 months?
P=2950 (principal)
i=0.081 per month (period=1 month)
n=18 (periods)
A=P(1+i)ni (accumulated value)
Take out the calculator and calculate the value of A, value after 18 months.
To calculate the value of your money after 18 months with an interest rate of 8.10% per month, we can use the formula for compound interest:
A = P(1 + r)^n
Where:
A = the final amount
P = the principal amount (initial investment)
r = interest rate per period (in decimal form)
n = number of periods
In your case:
P = R2950
r = 8.10% = 0.081 (decimal form)
n = 18 months
Plugging in these values, we can calculate the future value of your investment:
A = 2950(1 + 0.081)^18
Now, let's calculate it step-by-step:
Step 1: Calculate 1 + r
1 + 0.081 = 1.081
Step 2: Raise (1 + r) to the power of n
(1.081)^18 ≈ 2.937191
Step 3: Multiply the result from step 2 by the principal amount (P)
2950 * 2.937191 ≈ R8650.55
Therefore, the value of your money after 18 months will be approximately R8650.55.
To calculate the value of your money after a period of 18 months with an interest rate of 8.10% per month, you can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment
P = the principal amount (the initial investment)
r = the interest rate per period (in decimal form)
n = the number of compounding periods per year
t = the number of years
In this case, the principal amount (P) is R2950, the interest rate (r) is 8.10% per month (0.081 in decimal form), and the number of compounding periods per year (n) is 12 since we're dealing with monthly compounding. The number of years (t) is 18 months divided by 12 months per year, which equals 1.5 years.
Now, let's substitute these values into the formula:
A = R2950(1 + 0.081/12)^(12*1.5)
A = R2950(1 + 0.00675)^(18)
Calculating this, the value of your money after 18 months would be approximately R3446.34.