Question

1.3 Mrs Dlamini has taken a loan of R 200 000. She has to pay back the loan after fifteen (15) months at 12, 5% interest per annum, compounded annually. Calculate the total value that Mrs Dlamini needs to repay at the end of 15 months.​

Answer 1

Step-by-step explanation:To calculate the total amount that Mrs. Dlamini needs to repay at the end of 15 months with 12.5% interest compounded annually, you can use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:

A = the future amount (the total to be repaid)

P = the principal amount (the initial loan amount)

r = the annual interest rate (in decimal form, so 12.5% becomes 0.125)

n = the number of times interest is compounded per year (annually, so n = 1)

t = the number of years

Given:

P = R 200,000

r = 12.5% = 0.125

n = 1 (compounded annually)

t = 15 months (which is 15/12 years)

Now, plug these values into the formula:

A = 200,000(1 + 0.125/1)^(1*(15/12))

A = 200,000(1 + 0.125)^(1.25)

A = 200,000(1.125)^1.25

A = 200,000 * 1.125^1.25

A ≈ 200,000 * 1.14293

A ≈ R 228,586.58

So, Mrs. Dlamini needs to repay approximately R 228,586.58 at the end of 15 months.