Bongiwe invests R12 000 in a savings account at 6.5% per annum compound interest. Calculate how much there will be in a savings account after 5 years
We can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = amount after time t
P = principal (initial amount)
r = annual interest rate
n = number of times the interest is compounded per year
t = time in years
Plugging in the given values, we get:
A = 12000(1 + 0.065/1)^(1*5)
A = 12000(1.065)^5
A ≈ 16,362.36
Therefore, there will be approximately R16 362.36 in the savings account after 5 years.
To calculate the amount in the savings account after 5 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment/amount in the account after time t
P = the principal amount (initial investment)
r = annual interest rate (expressed as a decimal)
n = number of times interest is compounded per year
t = number of years
In this case, Bongiwe invested R12,000 at an annual interest rate of 6.5%. Since the question does not specify the compounding frequency, we will assume it is compounded annually (n = 1). Therefore:
P = R12,000
r = 6.5% = 0.065
n = 1
t = 5
Using the given values, we can calculate the future value of the investment:
A = 12,000(1 + 0.065/1)^(1*5)
A = 12,000(1.065)^5
A ≈ R15,430.24
Therefore, there will be approximately R15,430.24 in the savings account after 5 years.