Suppose you borrow R30000 from the bank for 6 semesters at an interest rate if 12,51% compounded yearly. What is the total amount that you should repay?
To calculate the total amount that you should repay, you can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the total amount that you should repay
P = the principal amount (R30000)
r = the annual interest rate (12.51% or 0.1251)
n = the number of times the interest is compounded per year (1, since it is compounded yearly)
t = the number of years (6 semesters, which is equivalent to 3 years)
Plugging in the values:
A = 30000(1 + 0.1251/1)^(1*3)
A = 30000(1.1251)^3
A = 30000(1.416213197)
A = 42486.3959
Therefore, the total amount that you should repay is R42486.40.