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8. Hilma invested N$20 000 on 01/01/2018 at 9.5 % interest p.a compounded semi-annually.

How much will she receive by 01/01/2022?
[5]

1 Answer

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Answer:

A = $29,201.97

A = P + I where

P (principal) = $20,000.00

I (interest) = $9,201.97

Explanation:

First, convert R as a percent to r as a decimal

r = R/100

r = 9.5/100

r = 0.095 rate per year,

Then solve the equation for A

A = P(1 + r/n)nt

A = 20,000.00(1 + 0.095/12)(12)(4)

A = 20,000.00(1 + 0.007916667)(48)

A = $29,201.97

Summary:

The total amount accrued, principal plus interest, with compound interest on a principal of $20,000.00 at a rate of 9.5% per year compounded 12 times per year over 4 years is $29,201.97

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