Question
question 4
4.1. percival gross salary is 600 000 per annum.
4.1.1 calculate his UIF monthly contributions.
4.1.2. calculate his provident fund monthly contributions.
4.1.3. charles invested R 176 000 with bank X for 20 years, which has an interest rate of 18 % per year compounded yearly. how much will he receive after 20 years?
4.1. percival gross salary is 600 000 per annum.
4.1.1 calculate his UIF monthly contributions.
4.1.2. calculate his provident fund monthly contributions.
4.1.3. charles invested R 176 000 with bank X for 20 years, which has an interest rate of 18 % per year compounded yearly. how much will he receive after 20 years?
Answers
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4.1.1. According to the UIF contribution table for 2021, the maximum monthly earnings used for UIF calculations is R17,712. Therefore, Percival's monthly UIF contribution will be 1% of R17,712, which is R177.12.
4.1.2. The calculation of Provident Fund contributions varies depending on the employer's policy. Assuming the employer's contribution is 10% of the employee's salary, Percival's monthly Provident Fund contribution will be 10% of R50,000 (which is his gross monthly salary) which is R5,000.
4.1.3. The formula to calculate compound interest is A = P(1+r/n)^nt, where A is the final amount, P is the principal amount, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the time period in years.
Using this formula, we can calculate Charles's total amount after 20 years:
A = 176,000(1+0.18/1)^(1*20)
A = 176,000(1.18)^20
A = 176,000(17.45)
A = R3,058,800
Therefore, Charles will receive R3,058,800 after 20 years with an interest rate of 18% per year compounded yearly.
4.1.2. The calculation of Provident Fund contributions varies depending on the employer's policy. Assuming the employer's contribution is 10% of the employee's salary, Percival's monthly Provident Fund contribution will be 10% of R50,000 (which is his gross monthly salary) which is R5,000.
4.1.3. The formula to calculate compound interest is A = P(1+r/n)^nt, where A is the final amount, P is the principal amount, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the time period in years.
Using this formula, we can calculate Charles's total amount after 20 years:
A = 176,000(1+0.18/1)^(1*20)
A = 176,000(1.18)^20
A = 176,000(17.45)
A = R3,058,800
Therefore, Charles will receive R3,058,800 after 20 years with an interest rate of 18% per year compounded yearly.