Calculate compound interest
Remember that compound interest is interest that is added to the principal amount at the end of each period.
The formula to calculate compound interest:
FV = Future value
PV = Present value
i = Effective interest rate
n = Number of periods
The grade 12 CAPS syllabus requires learners to do this calculation year by year. This is simple using the Sharp EL-535.
If you invest R 25 000 over 2 years at an interest rate of 9,5% what is the future value of this investment?
Press first key sequence
Press second key sequence
You have now stored the necessary variables into the calculator.
To calculate the FV after year one:
Press third key sequence
Press which will mean A is the PV for year two.
To calculate the FV after year two:
Press fifth key sequence
So your FV after 2 years = R 29 975.63