Thendo has to pay Rendi R27 000 twenty-five months from now. He decides to pay her back earlier. If a simple interest rate of 9,4% per year is applicable, then the amount that Rendi will receive from Thendo 12 months from now is

To determine the amount that Rendi will receive from Thendo 12 months from now, we can use the formula for simple interest:

\[ A = P (1 + rt) \]

Where:
- \( A \) is the future value of the investment/loan, including interest
- \( P \) is the principal investment amount (the initial amount of money)
- \( r \) is the annual interest rate (decimal)
- \( t \) is the time the money is invested or borrowed for, in years

Given:
- \( P = R27,000 \)
- \( r = 9.4\% = 0.094 \)
- \( t = \frac{25 - 12}{12} = 1.0833 \) years (since the difference in months is 13 months)

First, we find the interest accumulated over the 13 months:

\[ I = P \times r \times t \]
\[ I = 27,000 \times 0.094 \times 1.0833 \]
\[ I = 27,000 \times 0.101233 \]
\[ I = 2733.291 \]

Now, we calculate the total amount (A) that Rendi will receive:

\[ A = P + I \]
\[ A = 27,000 + 2733.291 \]
\[ A = 29,733.291 \]

Therefore, the amount that Rendi will receive from Thendo 12 months from now is approximately R29,733.29.

Would you like any details or have any questions?

Here are 8 related questions that might interest you:
1. What is the principal amount in an investment context?
2. How is the simple interest formula derived?
3. What are the differences between simple and compound interest?
4. How do you convert an annual interest rate to a monthly interest rate?
5. What is the impact of different interest rates on investment returns?
6. How do you calculate the time required to double an investment with simple interest?
7. What are some practical examples of simple interest in everyday life?
8. How does simple interest apply to loans and mortgages?

**Tip:** Always ensure to convert the time period to the same unit as the interest rate period to avoid calculation errors.

Learn how to calculate the future value with the simple interest formula using a specific example. This problem involves calculating the amount that Rendi will receive from Thendo 12 months from now based on a principal amount, annual interest rate, and time period. Suitable for high school students studying basic financial mathematics.

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