1) The accumulated amount after six years and the total interest that Trevor will receive if the interest rate is 4.5% per annum simple interest after 6 years are <u>R25,400</u> and <u>R5,400</u> respectively.
2) The accumulated amount after six years and the total interest that Trevor will receive if the interest rate is 4.5% per annum compound interest after 6 years are<u> R26,045.20</u> and <u>R6,045.20</u> respectively.
<h3>Data and Calculations:</h3><h3>Simple Interest:</h3>
Principal = R20,000
Investment period = 6 years
Interest rate = 4.5%
Simple interest for 6 years = R5,400 ($20,000 x 6 x 4.5%)
Principal + Interest = R25,400 (R20,000 + R5,400)
<h3>Compound Interest:</h3>
Principal = R20,000
Investment period = 6 years
Interest rate = 4.5%
N (# of periods) = 6 years
I/Y (Interest per year) = 4.5%
PV (Present Value) = R20,000
PMT (Periodic Payment) = R0
<u>Results</u>:
FV = R26,045.20
Total Interest = R6,045.2
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Answer:
8.0%
Step-by-step explanation:
We have been given that James Harmon pays $850.80 per year for his life insurance. If Mr. Harmon were to pay the premiums monthly, the payments would be $76.57.
First of all, we will find the amount paid for the year using the monthly rate by multiplying $76.57 by 12 (1 year = 12 months).
Now, we will use percent change formula.
Therefore, Mr. Harmon is paying 8.0% more for the year using the monthly rate.
.14(589)=$82.46
Change 14% to a decimal then multiply by 589.
