Grandpareats of Zakhele gives her R15000 for her \( 21^{\text {st }} \) birthday. C interest earned over 2 years at \( 12 \% \) p.a. interest.

Did you know that the concept of compound interest was first introduced by ancient civilizations like the Babylonians? They understood the value of earning interest on lent money over time! Today, we typically use the formula \( A = P(1 + r/n)^{nt} \) to calculate how interest compounds over the years, allowing us to see how investments can flourish if given enough time. Now, for some practical advice: when dealing with interest calculations, always double-check if the interest is simple or compounded. Simple interest is calculated on the principal amount only, whereas compound interest also considers previously earned interest. This can drastically change how much your initial amount grows over time, so understanding the difference is key to maximizing your savings!