1.

Use the formulae for
simple interest to calculate the value of each letter :

Number

Capital

Interest rate

Time

Interest

Amount

R

%

years

R

R

1.1

31 450

3,5

5

a

b

1.2

110 600

12

3

c

d

1.3

1 250

5,5

2

e

f

1.4

14 800

6

7

g

h

1.5

12 500

25,2

5

k

m

1.6

21 400

9

3

n

p

2.

Calculate
the amount that is paid out and the interest on the investment in each of the following cases :

Number

Capitaal

Interest rate

Time

When compounded

Interest

Amount

R

%

years

R

paid out

2.1

13 250

4

3

annually

a

b

2.2

65 000

8

4

annually

c

d

2.3

116 000

12,5

6

annually

e

f

2.4

12 800

22

3

quaterly

g

h

2.5

60 000

8,5

4,5

monthly

k

m

2.6

28 400 000

7,5

2,5

semi-annually

n

p

2.7

82 000

20

3

quarterly

q

r

2.8

1 537 000

15

1,5

monthly

s

t

2.9

180 000

18

3,5

monthly

u

v

2.10

2 500 600

8

4

semi-annually

w

x

3.

You want to buy furniture and pay cash. Thus you want to borrow R18 000,00.

The bank offers two options:

Option I. Pay the loan over 18 months at a rate of 8,5% and the interest

is compounded monthly.

Option II : Pay the loan over 30 months at a rate of 10% and the interest is

compounded quarterly.

Which option is the cheaper? Show all your calculations.

4.

The accompanying graph represents the value

of an investment at rates of 6% and 12% p.a.

and the interest is compoundded monthly.

4.1

What is the value of the investment? Explain

your answer.

4.2

Estimate the interest received on each

investment after 12 months.

4.3

Is the interest earned at 12% double that

at 6% ? Does your answer correspond

to the values at 36 months?

4.4

After how many monthe will the investment

at 12% have a value of more that R110?

Give an estimate and then test your answer.