12.9% per year is 12.9/4=3.225% per quarter. After the first quarter the interest is 3.225% of 1100=R35.475, so the principal has grown to R1135.475. For the second quarter the interest is 3.225% of R1135.475=R36.62 approx. making the principal grow to R1172.09. We continue like this for all remaining quarters in 8 years=32 quarters in all. The quick way of working out the principal after 32 quarters is to use the formula 1100*(1.03225)^32=R3037.45 so the interest is R1937.45. The number 1.03225 is 100%+3.225%=103.225%=1.03225.