Question 7 How much should I invest now into an account paying 4% p.a. compounded interest if I want the investment to have a value of K20 000 in 2 years, time? (2marks)

Solution

Solution

Principal : 18491.12

Solution steps

Translate the problem into an equation:

20000 = P (1 + \frac{0.04}{1})^{1 \cdot 2}

Solve for

P, 20000 = P (1 + \frac{0.04}{1})^{1 \cdot 2} : P = 18491.12

Principal : 18491.12

Popular Examples

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