question 4
4.1. percival gross salary is 600 000 per annum.
4.1.1 calculate his UIF monthly contributions.
4.1.2. calculate his provident fund monthly contributions.
4.1.3. charles invested R 176 000 with bank X for 20 years, which has an interest rate of 18 % per year compounded yearly. how much will he receive after 20 years?
4.1.1. According to the UIF contribution table for 2021, the maximum monthly earnings used for UIF calculations is R17,712. Therefore, Percival's monthly UIF contribution will be 1% of R17,712, which is R177.12.
4.1.2. The calculation of Provident Fund contributions varies depending on the employer's policy. Assuming the employer's contribution is 10% of the employee's salary, Percival's monthly Provident Fund contribution will be 10% of R50,000 (which is his gross monthly salary) which is R5,000.
4.1.3. The formula to calculate compound interest is A = P(1+r/n)^nt, where A is the final amount, P is the principal amount, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the time period in years.
Using this formula, we can calculate Charles's total amount after 20 years:
A = 176,000(1+0.18/1)^(1*20)
A = 176,000(1.18)^20
A = 176,000(17.45)
A = R3,058,800
Therefore, Charles will receive R3,058,800 after 20 years with an interest rate of 18% per year compounded yearly.
4.1.1. To calculate Percival's UIF (Unemployment Insurance Fund) monthly contributions, you can use the following formula:
UIF Monthly Contribution = Gross Salary * UIF Rate
The UIF rate is currently set at 1% of the gross salary.
So, for Percival's case:
UIF Monthly Contribution = 600,000 * 0.01
= 6,000 per month
Therefore, Percival's UIF monthly contributions would be 6,000 per month.
4.1.2. To calculate Percival's Provident Fund monthly contributions, you need to know the contribution rate set by his employer. Let's assume the contribution rate is 10% of his gross salary.
Provident Fund Monthly Contribution = Gross Salary * Provident Fund Contribution Rate
So, for Percival's case:
Provident Fund Monthly Contribution = 600,000 * 0.10
= 60,000 per month
Therefore, Percival's Provident Fund monthly contributions would be 60,000 per month.
4.1.3. To calculate the amount Charles will receive after 20 years with an interest rate of 18% per year compounded yearly, you can use the formula for compound interest:
Future Value = Present Value * (1 + Interest Rate)^Time
In this case:
Present Value = R 176,000
Interest Rate = 18% (or 0.18)
Time = 20 years
Future Value = 176,000 * (1 + 0.18)^20
= 176,000 * (1.18)^20
≈ R 1,547,021.23
Therefore, after 20 years, Charles will receive approximately R 1,547,021.23.