SIMPLE INTEREST
GIVEN:
𝑨 = 𝑷(𝟏 + 𝒊𝒏)
WHERE:
P=PRINCIPAL (ORIGINAL) AMOUNT
A= FINAL AMOUNT
i = interest rate
n = number of years
1. Xoliswa invests R1000 at a simple interest rate of 7% p.a. for 3 years.
How much money will be in her account by the end of the investment period?
2. Aisha invests R2000 at an interest rate of 6.1% p.a. simple interest. How much interest did
Aisha’s investment earn over 8 years?
3. How long will it take for R10 000 to grow to R 15 400 if it is invested at 9% p.a. simple interest?
4. How long will it take for a certain amount of money invested at 12.5 % p.a. to double its value ?
5. Determine how many months an investment of R 2 400 takes to accrue interest of R 360 at an
annual simple interest rate of 12%.
6. If R6 000 is required for a study loan at a simple interest of 8.5% p.a. , how much money must be
paid back after 4 years of studying?
HIRE PURCHASE – ALWAYS SIMPLE INTEREST
GIVEN:
𝑨 = 𝑷(𝟏 + 𝒊𝒏)
WHERE:
P=PRINCIPAL (ORIGINAL) AMOUNT
A= FINAL AMOUNT
i = interest rate
n = number of years
1. A PlayStation 3, worth R 4 500, is bought from a department store. A deposit of 15% is paid
in cash and the remainder of the amount is borrowed on a hire-purchase and is repaid in 4
years. The interest on the loan is charged at 18% p.a.
a. Determine deposit amount
b. Calculate the total amount that is paid for this PlayStation 3.
c. Do you think that is a good idea to buy something on credit? Support your answer with
reason.
EXCHANGE RATE
Example
The following shows the value of 1 $ (One Uited States Dollar) in some other
currencies:
US Dollar ($) Euro (€) British Pound (£) Indian Rupee (₹)
1 0.75611 0.65988 61.23117
1. How many Pounds can you get for $25?
2. How many Dollars can you get for €100?
3. If R10.2147 = $1, how many Pounds can you get for R500?
4. Complete the exchange rate for Pounds to Rupee: £1 = ?
ANSWER:
1. Pounds > US Dollar ∴ 1 $ = £ 0.65988 ∴ to find for $25 we must do
multiplication for both sides : 25 × 1 $ = 25 × £ 0.65988 ∴ 25 $ =
£ 16.497
2. US Dollar < Euro ∴ DIVISION $1 = € 0.75611 ∴we must do division for
both sides :
1 $ / 0.75611 = € 0.75611/ 0.75611 ∴ $ 1.3225588 = € 1
Now we calculate for €100: $ 1.3225588 × 100 = € 1 × 100
$ 132.25588 = € 100
3. R10.2147 = $1
$1=£ 0.65988 R10.2147=£ 0.65988
4. £ 0.65988 =₹ 61.23117£ 0.65988/0.65988 = ₹ 61.23117/0.65988
£ 1 = ₹ 92.7912711
EXERCISE
A.
SA Rand (R) US Dollar ($) British Pound (£) Australian Dollar (A$)
1 0.08995 0.05225 0.0996
1. How many Australian Dollars can you get for R400?
2. How many Rands will you need to buy 600 US dollars?
3. You buy the following items over the internet:
A fountain pen for $ 40.51
A graphical calculator for £ 65.42.
What is the combined total cost in Rands for these purchases?
B.
Thasibo bought an item in Brazil for R$ 400 (the symbol for Brazilian Real is R$).
The Rand-value of this is R 1980.
Complete: R$ 1 = R?
C.
Express the following as percentages:
𝑅25
Example: R25 of R 150 = 0.16667 ∴ 0.1667 × 100 = 16.667%
𝑅150
a) R180 of R120
b) 50c of R8 (Note: Always must be the same unit and this is the first step to
convert cents into Rands and then it calculates %.)
D.
Calculate the following:
120
a) 120% of R50 Example: × 𝑅50 = 60
100
b) 2% of R2 500 000
c) 15% of R12
Complete :
70 70𝑥
R21 is 70% of …. Example: × 𝑥 = 𝑅21 ∴ = 𝑅21
100 100
𝑅2100
∴ 70𝑥 = 100 × 𝑅21 ∴ 𝑥 = = 30
70
Answer : … 30
a) R36 is 30% of………………
b) R 46 is 115% of………………
a) Increase R180 by 50%
b) Decrease R480 by 87.5%
Jaydi buys and sells flash disks. He buys the disks at a cost of R100 and sells them
at a profit of 25%. What is his selling price?
F.
Mandy wants to order a book from the internet. The price of the book is $25,86.
What is the price of the book in rands? Take the exchange rate as R9,95 for $1.
