Question
Harry Henn pays a fixed amount of R200 at the beginning of each month for a period of five years towards a savings plan that earns interest at a rate of 15% per annum compounded monthly. What amount will he receive from this savings plan?
Answers
GPT 3.5
To calculate the amount Harry Henn will receive from the savings plan, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the savings plan
P = the fixed monthly payment (R200)
r = the annual interest rate (15% or 0.15)
n = the number of times the interest is compounded per year (12 for monthly)
t = the number of years (5)
Plugging in the values, we get:
A = 200(1 + 0.15/12)^(12*5)
A = 200(1 + 0.0125)^60
A = 200(1.0125)^60
A = 200(2.032485)
A = R406.50
Therefore, Harry Henn will receive R406.50 from this savings plan at the end of the five-year period.
A = P(1 + r/n)^(nt)
Where:
A = the future value of the savings plan
P = the fixed monthly payment (R200)
r = the annual interest rate (15% or 0.15)
n = the number of times the interest is compounded per year (12 for monthly)
t = the number of years (5)
Plugging in the values, we get:
A = 200(1 + 0.15/12)^(12*5)
A = 200(1 + 0.0125)^60
A = 200(1.0125)^60
A = 200(2.032485)
A = R406.50
Therefore, Harry Henn will receive R406.50 from this savings plan at the end of the five-year period.