Peter made a deposit of R11000 into his savings account. Four years later he made a deposit of R1000. How much is in his account 6 years after the first deposit, if the interest rate is 15% compounded annually?
To calculate the total amount in Peter's account 6 years after the first deposit, we need to calculate the compound interest earned on both deposits.
For the first deposit of R11000 made 4 years ago:
Principal amount (P1) = R11000
Number of years (n1) = 6 - 4 = 2 years
Interest rate (r) = 15%
Compound interest formula:
A1 = P1(1 + r)^n1
A1 = R11000(1 + 0.15)^2
A1 = R11000(1.15)^2
A1 = R11000(1.3225)
A1 = R14547.50
For the second deposit of R1000 made 2 years ago:
Principal amount (P2) = R1000
Number of years (n2) = 2 years
Interest rate (r) = 15%
Compound interest formula:
A2 = P2(1 + r)^n2
A2 = R1000(1 + 0.15)^2
A2 = R1000(1.15)^2
A2 = R1000(1.3225)
A2 = R1322.50
Total amount in Peter's account after 6 years:
Total amount = A1 + A2
Total amount = R14547.50 + R1322.50
Total amount = R15870.00
Therefore, Peter has R15870.00 in his savings account 6 years after the first deposit.