SOLUTION: Anne invests R6000 for 3 years at 12,5% p.a compounded quarterly. How much interest will she earn after 3 years?

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Question 582423: Anne invests R6000 for 3 years at 12,5% p.a compounded quarterly. How much interest will she earn after 3 years?
Answer by Edwin McCravy(20054) (Show Source):
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Anne invests R6000 for 3 years at 12,5% p.a compounded quarterly. How much interest will she earn after 3 years?

First we will calculate the final amount using the equation A = P(1 + )^nt in which A = the final amount of rupees = ? P = the biginning amount of rupees = 6000 r = the rate expressed as a decimal = 0.125 n = the number of times per year the interest is compounded = 4 t = the number of years = 3 A = 6000(1 + )^4*3 A = 6000(1 + .03125)¹² A = 6000(1.03125)¹² A = R8679.98 Interest = A - P = R8679.98 - R6000 = R2679.98 Edwin