The formula to calculate the future value of an investment with compound interest is:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment/loan, including interest
P = the principal investment amount (R15000)
r = the annual interest rate (15% or 0.15)
n = the number of times that interest is compounded per year (2 for semi-annually)
t = the number of years the money is invested for (2)
Plugging in the values:
A = 15000(1 + 0.15/2)^(2*2)
A = 15000(1 + 0.075)^4
A = 15000(1.075)^4
A = 15000(1.322917)
A = 19843.755
Therefore, the amount will be R19843.76 at the end of 2 years.
A sum of R15000 is invested at a nominal rate of 15% per annum compounded semi-annually. What will this amount to at the end of a term of 2 years?
R20032.04
R17334.38
R11232
R17395.40
R26752.17
1 answer