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6. Maresa earns R20 000 per month. She decides to invest \( \frac{1}{10} \) of her money at \( 8 \% \) simple interest per year. a) What amount does she invest? b) How much interest will she earn at the end of the year? c) How much money will be in her investment after 5 years?

Ask by Little Cole. in South Africa
Mar 11,2025

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- (a) Maresa invests R2,000. - (b) She earns R160 in interest at the end of the year. - (c) After 5 years, her investment will be worth R2,800.

Solution

**(a) Calculating the Amount Invested** Maresa invests \(\frac{1}{10}\) of her monthly salary. Her salary is \(\text{R}20\,000\), so the amount invested is \[ \text{Investment} = \frac{1}{10} \times \text{R}20\,000 = \text{R}2\,000. \] --- **(b) Calculating the Interest Earned at the End of the Year** The simple interest formula is given by \[ I = P \times r \times t, \] where \(P\) is the principal, \(r\) is the annual interest rate (in decimal form), and \(t\) is the time in years. Here, \(P = \text{R}2\,000\), \(r = 0.08\) (since \(8\% = 0.08\)), and \(t = 1\) year. Thus, \[ I = \text{R}2\,000 \times 0.08 \times 1 = \text{R}160. \] --- **(c) Calculating the Total Investment Value After 5 Years** For simple interest over 5 years, the total interest earned is \[ I_{\text{5 years}} = \text{R}2\,000 \times 0.08 \times 5 = \text{R}800. \] The total amount in the investment after 5 years is the sum of the principal and the interest: \[ \text{Total Amount} = \text{Principal} + \text{Interest} = \text{R}2\,000 + \text{R}800 = \text{R}2\,800. \] --- **Answers:** - (a) \( \text{Amount Invested} = \text{R}2\,000 \) - (b) \( \text{Interest Earned at the End of the Year} = \text{R}160 \) - (c) \( \text{Total Amount After 5 Years} = \text{R}2\,800 \)

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Bonus Knowledge

Maresa invests R2 000, which is \( \frac{1}{10} \) of her monthly earnings of R20 000. This amount opens the door to potential earnings through interest, making it a smart move in her financial journey! At the end of the year, she will earn R160 in interest, calculated using the simple interest formula: \( \text{Interest} = P \times r \times t \), where \( P \) is R2 000, \( r \) is 0.08 (8%), and \( t \) is 1 year. That’s not too shabby for letting her money work for her! After 5 years, her investment would grow to R3 000, since she earned R160 annually — a total of R800 in interest over those 5 years. So, it’s R2 000 plus R800, leading to R2 800 strategically set aside for her future. Time really does pay off, doesn’t it?

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