Question

Mrs. Grant is the mother of Esther Grant, currently in grade 8. Mrs. Grant wants to invest R15,000 to give to Esther to start her business after completing high school. Calculate the value of the investment at t=5 years with simple interest of 18.5%.

Answer 1

After 5 years with simple interest at 18.5%, Mrs. Grant's R15,000 investment will grow to R28,875.

Step-by-step explanation:

To calculate the value of the investment after 5 years with simple interest, we use the formula for simple interest:

Interest = Principal × Rate × Time

For Mrs. Grant's investment:

Principal = R15,000

Rate = 18.5% or 0.185 (in decimal form)

Time = 5 years

Interest = R15,000 × 0.185 × 5 = R13,875

To find the total future amount, we add the interest to the principal:

Total future amount = Principal + Interest

Total future amount = R15,000 + R13,875 = R28,875