Maharaj Incorporated invested an amount of R5 000 over a period of two years at 8% compounded interest per year in a fixed deposit - NSC Business Studies - Question 4 - 2021 - Paper 2

To calculate the compound interest, we can use the formula:

$P = P_0 (1 + \frac{r}{100})^n$

Where:

• $P_0$ = initial investment = R5,000
• $r$ = interest rate = 8%
• $n$ = number of years = 2

Plugging in the values, we get:

$P = 5000 (1 + \frac{8}{100})^2$

Calculating:

$P = 5000 (1.08)^2 = 5000 (1.1664) = R5832$

Thus, the total amount after 2 years is R5832.

The interest earned is given by:

$\text{Interest} = P - P_0 = 5832 - 5000 = R832$