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Mr X invested R20000 at 10% interest compounded annually for 5 years and Mrs X invested the same amount R20000 at 10% simple intetest for 5
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Mr X invested R20000 at 10% interest compounded annually for 5 years and Mrs X invested the same amount R20000 at 10% simple intetest for 5 years Who will get more return on investment between Mr X and Mrs X show calulations
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Mathematics
7 months
2021-08-09T07:54:43+00:00
2021-08-09T07:54:43+00:00 1 Answers
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Answer:
Since R32,210 is greater than R30,000; it simply means that Mr X would get greater return on investment
Step-by-step explanation:
a) Mr X Return
We have the compound interest formula as;
V = P(1 + r)^t
V is the value yielded after some certain amount t
Where P is the amount invested = R20,000
r is the yearly interest rate = 10/100 = 0.1
t = 5 years
so we have;
V = 20,000(1 + 0.1)^5 = R32,210.2
b) Mrs X return
We use the simple interest formula here;
A = P + I
I = PRT/100
where P, the principal is the amount invested = R20,000
R = 10%
T = 5 years
I = (20,000 * 10 * 5)/100
I = R10,000
A = R20,000 + R10,000
A = R30,000
Since R32,210 is greater than R30,000; it simply means that Mr X would get greater return on investment