Question 8

8.1 A new cell phone was purchased for R 7 200. Determine the depreciation value after 3 years if the cell phone depreciates at 25% per annum on reducing balance method. (3)

8.2 An amount of R 500 is invested at x % per annum compounded half yearly. After 6 years it has grown to R 1 126,10. Calculate the value of x, correct to two decimal places. (4)

8.3 John invest R 120 000. He is quoted a nominal interest rate of 7,2 % per annum compounded monthly.

8.3.1 Calculate the effective interest rate p.a. correct to three decimal places. (3)

8.3.2 Use the effective interest rate to calculate the value of John’s investment if he invested the money for 3 years. (3)

8.3.3 Suppose John invest his money for a total of 4 years, but after 18 months he makes a withdrawal of R 20 000. How much will he receive at the end of 4 years? (4)

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