Answered

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4.1 An investor deposited R50 000-00 for 3 years at 10% p.a. Determine the net
price at maturity.
(3)
​

Sagot :

xujoy000

To calculate the net price at maturity, we use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:

A = the amount at maturity

P = the principal amount (R50,000)

r = the annual interest rate (10% or 0.10)

n = the number of times interest is compounded per year (assuming it's compounded annually, n = 1)

t = the number of years the money is invested for (3 years)

Plugging in the values:

A = 50000(1 + 0.10/1)^(1*3)

A = 50000(1.10)^3

A = 50000(1.331)

A = 66550

Therefore, the net price at maturity is R66 550 at the end of 3 years.

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