Understanding the principles of simple and compound interest is crucial in managing personal finances, making investment decisions, and assessing the depreciation of assets. This guide provides a series of questions and answers that explore various scenarios involving both simple and compound interest calculations. Each problem is accompanied by a detailed solution, including the relevant formulas and step-by-step calculations. By working through these examples, you’ll gain a clearer understanding of how interest rates and time periods impact the growth of investments and the depreciation of assets. Whether you’re a student, a financial professional, or someone looking to improve your financial literacy, these exercises will help you master the basics of interest-related mathematics.
Simple Interest Grade 12 Financial Maths Questions and Answers
1. Question:
Lehlohonolo opens a savings account that bears 15% simple interest per annum. If he deposits R 5 700, how much money will he have after 11 years and 7 months?
Answer: Given: Principal (P) = R 5 700, Rate (R) = 15%, Time (T) = 11.583 years (11 years 7 months)
Formula: Simple Interest (SI) = P × R × T
2. Question:
How long would it take for R8 400 to grow to R15 000 at a simple interest rate of 7.5% p.a.? Give your answer correct to the nearest month.
3. Question:
How much should be invested now at 8% simple interest per annum to accumulate to R12 000 in 6 years?
4. Question:
A car worth R145 000 depreciates at the rate of 16% annually according to the straight line method. What will the value of the car be after 4.5 years?
5. Question:
How long would it take for the car in the previous question to depreciate in value to R100 000? Give your answer correct to the nearest month.
6. Question:
If Sipho buys a camera for R899 at the beginning of the year 2010 and intends to sell it for R350 at the end of 2014, what would the rate of depreciation be assuming simple interest decay?
Compound Interest Grade 12 Financial Maths Questions and Answers
7. Question:
Kwena opts for an investment with an interest rate of 8% per annum compounded quarterly. How much will he have after 6 years if he invests R2000?
8. Question:
Juju invests R18 000 into a savings account with an interest rate of 9% per annum compounded monthly. If he invests a further R10 000 into the account after 4 years, how much will he have after 6 years and 8 months?
9. Question:
How much should be invested now at 8% interest per annum compounded annually to accumulate to R12 000 in 6 years?
10. Question:
What is the annual interest rate if R8 700 is compounded semi-annually and grows to R12 500 after 4 years?
11. Question:
A car worth R145 000 depreciates at a compound rate of 16% per annum. Calculate the book value of the car after 4.5 years.
