2.6 Use the formula A = p(1 +in) Compound interest at 7%pa on a loan of R5 600 for 4 years .Round your answer to the nearest cents.
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Amount of interest = RS 186

Explanation:

Given:

Loan amount = Rs600

Rate = 7% = 0.07

Number of year = 4 year

Find:

Amount of interest

Computation:

Amount of interest = p[(1+r)ⁿ-1]

Amount of interest = 600[(1+0.07)⁴-1]

Amount of interest = 600[(1.07)⁴-1]

Amount of interest = 600[(1.31 - 1]

Amount of interest = 600[(0.31]

Amount of interest = RS 186