Consider an investment account that earns simple interest at a rate of 9% per annum. What would the balance in the account be after 8 months, if R 2 100 is invested in this account today?
To calculate the balance in the account after 8 months, we need to first calculate the interest earned over this period.
Simple interest formula:
I = P * r * t
Where:
I = interest earned
P = principal amount (R 2 100)
r = interest rate per annum (9% or 0.09 as a decimal)
t = time in years (8 months = 8/12 = 0.67 years)
Now, calculate the interest earned:
I = 2 100 * 0.09 * 0.67
I = 127.53
Next, add the interest earned to the principal amount to find the total balance after 8 months:
Balance = Principal + Interest
Balance = 2 100 + 127.53
Balance = R 2 227.53
Therefore, the balance in the account after 8 months would be R 2 227.53.