Calculate the interest earned on N$2 000 invested for 3 years at

Question

a rate of 8% p.a. compound interest

Answer 1

First, we need to calculate the interest earned using the compound interest formula:

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

Where:
A = the amount of money accumulated after n years, including interest.
P = the principal amount (the initial amount of money)
r = annual interest rate (in decimal form)
n = number of times that interest is compounded per year
t = number of years the money is invested for

In this case:
P = N$2,000
r = 8% = 0.08
n = 1 (compounded annually)
t = 3 years

A = 2000(1 + 0.08/1)^(1*3)
A = 2000(1 + 0.08)^3
A = 2000(1.08)^3
A = 2000(1.259712)
A = N$2,519.42

Now, to calculate the interest earned:
Interest = A - P
Interest = N$2,519.42 - N$2,000
Interest = N$519.42

Therefore, the interest earned on N$2,000 invested for 3 years at a rate of 8% p.a. compound interest is N$519.42.