Everything Maths Grade 10

SOLUTION

Step 1: Write down the known variables

A= 4000

P= 2500

n= 5

Step 2: Write down the formula

A=P(1 +in)

Step 3: Substitute the values and solve fori

4000 = 2500 (1 +i5)

4000

2500

= 1 +i 5

4000

2500

1 =i 5

( 4000

2500

)

1

5

=i

i=0,12

Step 4: Write the final answer

A simple interest rate of 12% p.a. will be needed when investing R 2500 for 5 years to become R 4000.

Exercise 9 – 1:

1.An amount of R 3500 is invested in a savings account which pays simple interest at a rate of 7,5% per

annum. Calculate the balance accumulated by the end of 2 years.

2.An amount of R 4090 is invested in a savings account which pays simple interest at a rate of 8% per

annum. Calculate the balance accumulated by the end of 4 years.

3.An amount of R 1250 is invested in a savings account which pays simple interest at a rate of 6% per

annum. Calculate the balance accumulated by the end of 6 years.

4.An amount of R 5670 is invested in a savings account which pays simple interest at a rate of 8% per

annum. Calculate the balance accumulated by the end of 3 years.

5.Calculate the accumulated amount in the following situations:

a)A loan of R 300 at a rate of 8% for 1 year.

b)An investment of R 2250 at a rate of 12,5% p.a. for 6 years.

6.A bank offers a savings account which pays simple interest at a rate of 6% per annum. If you want to

accumulate R 15 000 in 5 years, how much should you invest now?

334 9.2. Simple interest