R1 570 is invested at 12% p.a. compound interest. After how many years will the investment be worth R23 000?
A farmer has just bought a new tractor for R800 000. He has decided to replace the tractor in 5 years' time, when its trade-in value will be R200 000. The replacement cost of the tractor is expected to increase by 8% per annum.
The farmer wants to replace his present tractor with a new one in 5 years' time. The farmer wants to pay cash for the new tractor, after trading in his present tractor for R200 000. How much will he need to pay?
• One month after purchasing his present tractor, the farmer deposited x rands into an account that pays interest at a rate of 12% p.a., compounded monthly.
• He continued to deposit the same amount at the end of each month for a total of 60 months.
• At the end of 60 months he has exactly the amount that is needed to purchase a new tractor, after he trades in his present tractor.
Calculate the value of x.
Suppose that 12 months after the purchase of the present tractor and every 12 months thereafter, he withdraws R5 000 from his account, to pay for maintenance of the tractor. If he makes 5 such withdrawals, what will the new monthly deposit be?
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