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?

Answer 1

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.