PK plans to deposit R3 500 into a tax-free savings account at the end of each quarter for the next five years. She will earn 7.25% interest per annum on the savings account. The interest will be capitalised on a monthly basis. How much will PK have in the account at the end of the five-year period?
Added by Travis R.
Step 1
- The annual interest rate is 7.25%. Since the interest is capitalized monthly, we first convert the annual rate to a monthly rate: \[ \text{Monthly interest rate} = \frac{7.25\%}{12} = \frac{0.0725}{12} \approx 0.00604167 \] Show more…
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