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An investment of R2000 is made at 10% per year simple interest for 3 years

The initial amount plus interest earned is then invested for 5 years at 16% simple interest.
Calculate the value of the investment at the end of the 8 years

User Mgoffin
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Answer:

Step-by-step explanation:Let's break down the problem into two parts: the first investment for 3 years and the second investment for 5 years.

**First Investment (3 years):**

Given:

- Principal (\(P_1\)) = R2000

- Interest rate (\(r_1\)) = 10% or 0.10 (in decimal form)

- Time (\(t_1\)) = 3 years

The formula for calculating simple interest is:

\[I = P \times r \times t\]

Where:

- \(I\) = Interest earned

- \(P\) = Principal

- \(r\) = Interest rate

- \(t\) = Time

Calculate the interest earned (\(I_1\)) for the first investment.

**Second Investment (5 years):**

The initial amount plus interest earned (\(P_1 + I_1\)) from the first investment becomes the principal (\(P_2\)) for the second investment.

Given:

- Principal (\(P_2\)) = \(P_1 + I_1\)

- Interest rate (\(r_2\)) = 16% or 0.16 (in decimal form)

- Time (\(t_2\)) = 5 years

Calculate the interest earned (\(I_2\)) for the second investment.

**Total Value at the End of 8 Years:**

The total value at the end of 8 years will be the sum of the principal of the second investment and the interest earned from the second investment.

Calculate the total value at the end of 8 years.

Keep in mind that simple interest does not compound, so the interest earned each year remains constant.

Please perform the calculations for \(I_1\), \(I_2\), and the total value to find the final amount of the investment at the end of 8 years.

User Blazs
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