To determine who will have the most money at the end of 15 years, we can calculate the future value of their investments.
For Paul:
Interest rate = 10% p.a. = 2.5% per quarter
Number of quarters in 15 years = 15 years * 4 quarters/year = 60 quarters
Future value = R 1,500 * ((1 + 0.025)^60 - 1) / 0.025 = R 472,655.13
For Peter:
Interest rate = 14% p.a.
Number of years = 15 years
Future value = R 3,500 * (1 + 0.14)^15 = R 15,059.06
Therefore, Paul will have the most money at the end of 15 years with R 472,655.13.
Two friends decide to invest some money. Paul invests R 1 500 every 3 months into a bank that pays 10% p.a. interest every quarter. Peter invests R 3 500 every year into a different bank that pays 14% p.a. Who will have the most money at the end of 15 years?
Paul
Peter
It is impossible to say
None of the above.
1 answer
1 answer