Emma wants to save R125 000 in the next 2 years. If she invest, what compound interest rate would she need to receive? Round your answer off to one decimal place.

To determine the compound interest rate Emma needs, we can use the formula for compound interest: \[ A = P(1 + r/n)^{nt} \] where: - A = the future value of the investment/loan, including interest (R125,000) - P = the principal investment amount (the initial deposit or loan amount) - r = the annual interest rate (decimal) - n = the number of times that interest is compounded per year - t = the number of years the money is invested or borrowed for (2 years) Assuming Emma starts with a principal (P) of R0, we need to rearrange to find the interest rate (r). To achieve R125,000 in 2 years, she can start with the formula: \[ 125,000 = P(1 + r)^2 \] If we plug in R0 as a starting principal, it doesn’t make sense since we want a rate based on some initial investment. Thus, let’s say she needs to find the necessary rate based on her *current* savings. However, if you'd like to solve it with a given principal amount, we can use a hypothetical R100,000 as a baseline for practical calculations. After some iterations, you could find that Emma needs around an estimated interest rate of approximately 11.8% compounded annually to reach her financial goal. To see how such plans can work out, many banks and financial institutions offer calculators right on their websites that demonstrate growth over time with varying rates. They are super user-friendly, and you might actually discover you can tweak your input to see how much faster you could reach your goal with a slightly higher rate or different deposit amounts. Plus, these tools can give you a real-time sense of how investing works!