Question 934662
1)James pays $400/month. At the end of the year, his rent will increase 20 %.

20% of 400 is 20/100*400= 80
Therefore , the rent increase is $80. His new rent at the end of the year would be $400+$80=$480/month. 

2)Here, we will need the compound interest formula, but with a twist, 
               FV= PV( 1+ r/k)^(nk)

FV= future value
PV= principal value
r=  interest
k=  number of compounding periods in one year
nk= number of compounding periods multiplied by number of years.

Why does the interest have to be divided by 12? This is because the interest is 21% compounded monthly, so it really is 21%/12 as there are 12 months in a year.If it was compounded annually, k= 1, compounded quarterly, k= 4 and compounded daily k= 365

So, to fill in the formula, we have

FV=  PV(1+ r/12)^(nk)
FV=  2000 (1+ 0.21/12)^ 12*7
FV=  2000 (1+ 0.0175)^ 84
FV=  2000 (1.0175)^84
FV=  8588.5747
FV=  8588.57

3) The Zondo family uses a loan of R8500.They repay the loan in one amount at the end of 3 years.How much money would the Zondos need to repay the loan if the interest is:
A)17% per annum simple interest
B)14% per annum compounded interest

A) For simple interest, the formula would be I= Prt
   I= Interest, P= principal r=rate of interest t= time

I= prt
I= 8500 * 0.17 * 3
I= 4335
So, after 3 years, they pay back 8500 + 4335 = $12 835!

B)FV=  PV(1+ r/1)^(nk)
  FV=  8500 (1+ 0.14/1)^(1*3)
  FV=  8500 (1.14)^3
  FV=  12593.124
  FV=  12593.12


So, after 3 years, they pay back $12 593. 12 !