1.2 Mrs Pillay intends to purchase a birthday present for her mother. Table 1 below shows her
investment plan for two types of interest offered by the bank.
Table 1: R1000 invested at 8% p.a for 4 years
No. of years
0
1
2
Investment A
Investment B
R1 000
R1 080
R1 160
3
R1 240
4
R1 320
R1 000
R1 080
R1 166.40
R1 259.71
R1 360.49
Study the table above and answer the questions that follow
1.2.1 Identify the type of interest used on Investment A and explain your answer
1.2.2 Use the investment of R1 000 and the interest rate to show how the amount of
R1 259.71 was calculated in investment B at the end of the 3rd year.
(3)
(4)